Hedged carry trade?

S

SideShowBob

Assuming I wanted to put on a JPY/AUD carry trade, but was concerned about adverse currency moves, couldn't I just buy the appropriate cross-rate futures contract at CME to hedge myself and just keep the interest? Or would the cross-rate futures contract already take the carry trade interest into account in it's pricing?
 
Quote from makloda:

Already discounts the interest. Unfortunately there is no free lunch.
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Not true in prison you get a free lunch ... but you have to be someone's bitch too :eek:
 
Quote from SideShowBob:

Assuming I wanted to put on a JPY/AUD carry trade...
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For the sake of accuracy, what you want to trade is AUD/JPY. I don't think you're going to find too many places where you can trade JPY/AUD. The former is the market convention.
 
Quote from makloda:

Already discounts the interest.
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Hi makloda

Can you explain a little bit further how are interests include in pricing of futures contracts refer to above subject ?
Thanks & happy trading
 
Quote from jankoelite:

Hi makloda

Can you explain a little bit further how are interests include in pricing of futures contracts refer to above subject ?
Thanks & happy trading
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The futures trade at a discount.
 
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