Positive carry,

Definition of Positive carry:

1. The positive carry strategy is most often used in the currency markets, where investors can exploit the relative strengths and weaknesses of various currencies.

2. Positive carry is a strategy that involves borrowing money in order to invest it to make a profit on the difference between the interest paid and the interest earned.

3. The cost of borrowing money to fund an investment that does not exceed the profit earned. Compare to Negative Carry. See Margin.

How to use Positive carry in a sentence?

1. Traders who use positive carry keep an eye on the Federal Reserve, whose activities affect currency rates around the world.
2. The positive carry strategy relies on the relative strength or weakness of currencies used in different exchanges.
3. A trader can borrow money in a weak currency, invest it in a strong currency, and pocket the difference between the loan cost and the investment's return.