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SuavestArt
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FX carry trade is pretty clear to me when one's trading currencies physically. The return for this trade will depend on the interest rate you're paying for the USD borrowed, the foreign interest rate received by lending the foreign currency and changes on the FX rate.

What I don't understand is why trading FX Futures can also be deemed a carry trade. I mean, I'm not paying or receiving anything by borrowing/lending currencies - the trade PnL seems only to depend on FX rate changes between the day the trade is executed and its maturity.

I'm aware of UIP and how local and foreign interest rates go into pricing FX Futures.


EDIT: To be clearer, I'm concerned about the case in which there is market risk. For example, on page 4 of this CME's document, right after an example of FX carry trade has been given, it says:

This transaction can also be executed in the futures/forward market by simply purchasing the desired currency pair, which is equivalent to buying one currency and selling the other.

Why trading the FX Futures is then the same as trading currencies physically?

FX carry trade is pretty clear to me when one's trading currencies physically. The return for this trade will depend on the interest rate you're paying for the USD borrowed, the foreign interest rate received by lending the foreign currency and changes on the FX rate.

What I don't understand is why trading FX Futures can also be deemed a carry trade. I mean, I'm not paying or receiving anything by borrowing/lending currencies - the trade PnL seems only to depend on FX rate changes between the day the trade is executed and its maturity.

I'm aware of UIP and how local and foreign interest rates go into pricing FX Futures.

FX carry trade is pretty clear to me when one's trading currencies physically. The return for this trade will depend on the interest rate you're paying for the USD borrowed, the foreign interest rate received by lending the foreign currency and changes on the FX rate.

What I don't understand is why trading FX Futures can also be deemed a carry trade. I mean, I'm not paying or receiving anything by borrowing/lending currencies - the trade PnL seems only to depend on FX rate changes between the day the trade is executed and its maturity.

I'm aware of UIP and how local and foreign interest rates go into pricing FX Futures.


EDIT: To be clearer, I'm concerned about the case in which there is market risk. For example, on page 4 of this CME's document, right after an example of FX carry trade has been given, it says:

This transaction can also be executed in the futures/forward market by simply purchasing the desired currency pair, which is equivalent to buying one currency and selling the other.

Why trading the FX Futures is then the same as trading currencies physically?

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SuavestArt
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Carry trade by trading FX Futures

FX carry trade is pretty clear to me when one's trading currencies physically. The return for this trade will depend on the interest rate you're paying for the USD borrowed, the foreign interest rate received by lending the foreign currency and changes on the FX rate.

What I don't understand is why trading FX Futures can also be deemed a carry trade. I mean, I'm not paying or receiving anything by borrowing/lending currencies - the trade PnL seems only to depend on FX rate changes between the day the trade is executed and its maturity.

I'm aware of UIP and how local and foreign interest rates go into pricing FX Futures.