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Tag: leverage of 10x

BOJ Rate Hike: What’s Left of the 40% Yield Carry Trade?

The yen carry trade relies on exploiting the interest rate differential between Japan (low) and foreign countries (high), adjusted by the exchange rate variation ROI_Carry (r_foreign - r_domestic) - ΔS_fx + α(Leverage) - β(Costs). Historically, this model has generated annualized returns of about 35-40% due to an average favorable spread of 4.40% and a leverage…

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