Quote:
Originally Posted by sgoran
Please gentilmens can you tell me something? I watched the pair AUD/CHF and I saw that in 10 years this pare is trading in a range of cca 3000 pips. If you go long you have daily swap of around 35$ if you play 1 lot on standard account. If you calculate, in a year you could cover have more than 1200 pips only with swap. Am I wrong? Sorry I am a begginer.
Thank you very much.
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Hello sgoran,
First of all, the rolls on every currency pair will change over time. As central banks change their respective country's benchmark rates and foreign demand for a currency fluctuates, the relative rate its assets yield will change.
However, theoretically, if the daily rollover stays at $35, a long position would make $12,460 in a year ($35*365 days in a year). As a standard pip cost for the pair now is $9.01, that translates into 1,383 pips over the period.
This is a considerable carry; but it is important to remember that the rollover changes with time and you are still exposed to considerable capital losses. It would only take a four pip move against your long position to completely wipe out your carry for a day. This is the burden of leverage and the reason for making carry trade baskets for diversification.
