Carry on trading
Widespread unwinding of carry trade positions has been apparent in recent months. How has this affected the performance of, and activity in, exchange-traded funds and other structured products built upon the strategy? By Ryan Davidson
Unwinding of yen carry trade positions by proprietary trading desks, hedge funds and Japanese retail traders over the past few months has had a significant impact on some of the newer investors in the strategy, namely exchange-traded funds (ETFs) and over-the-counter structured products.
The carry trade involves borrowing in the currency of a country with low interest rates, such as the yen, and
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