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Charlie Don't Surf

Can Individuals Take Advantage Of The Carry Trade

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Short of becoming a national of another country is there any way an individual (or company) could borrow at another country's interest rates. For example practically zero in Japan.

It seem that the banks have been making an absolute killing doing this over the last 10 years, so how about the rest of us?

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Given the small percentage difference (gearing) you'd need a lot of money to exploit this - it sounds a bit like arbitrage betting...

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stoozing with credit cards is the easiest way I can think of, though you are limited by your credit rating of course.

I've read online of people building up 25-30k on 0% credit cards and putting that in a high interest account. No risk of currency fluctuations either.

Edited by bottletop

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stoozing with credit cards is the easiest way I can think of, though you are limited by your credit rating of course.

I've read online of people building up 25-30k on 0% credit cards and putting that in a high interest account. No risk of currency fluctuations either.

A work colleague of mine did that and he had over £60k on credit cards at any one time. He had a whole load of spreadsheets to track them (since missing a payment would be bad) but he kept on rolling them over onto new 0% credit cards.

The funny thing was, the more he borrowed and paid off, the more others would lend him. He also told me that he would close down the CC once the 6 months (or whatever) was up but then you could re-apply after 6 months.

He actually took all the money and put it in his offset mortgage! Since he was a higher rate payer, I'm guessing he had an effective 12% post-tax return on free debt!

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Sure anyone in the UK can open a spreadbetting account. or an FX trading account and take advatage of the yeild differential by borrowing yen and buying GBP. you can gear yourself up to the 9's doing this. but the more you gear the faster you loose.

BEWARE - this was an excellent thing to do 2001-2005 but is now VERY dangerous. the era of yen carry is shortly about to end once the rates go up capital will FLOOD back into Japan.

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a mate is currently doing this in the forex market from his laptop, the carry trade gives him a slight advantage...

You can borrow in Yen and invest in another currency with a currency broker who charges and gives interest over the underlying derviatives.

You will then be charged the interest for the 1bln Yen (1%) and given the interest payments for the other currency.

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which is fine until the hedge funds and prop traders who have been doing this for years all decide to pay back the quadrillion yen they borrowed all at once :)

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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