Carry trade calculator

This easy-to-use carry trade calculator helps you figure out the profit or loss resulting from interest rate differences in a currency swap.
Updated: Sep 12, 2022

The Invezz carry trade calculator calculates the amount of interest that’s either earned or paid on currency pair trades. Keep reading to learn how our carry trade calculator works, and how you can use that knowledge to inform yourself when forex trading.

How to use our carry trade calculator

Using our carry trade calculator means following these steps:

  1. Enter in the currency you use for your account (for example, GBP).
  2. Enter in the currency pair you wish to trade (for example, GBP/EUR).
  3. Enter in the action you wish to perform (either buy/long or sell/short).
  4. Enter in the lend rate for the trade.
  5. Enter in the borrow rate for the trade.
  6. Type your trade size.
  7. Type the number of days you’ve held (or plan to hold) your position.

Your interest earned will appear at the bottom instantly after you’ve punched in all of this information.

How the carry trade calculator works

The Invezz carry trade calculator tabulates the profit or loss you’ve made on your forex currency pair trade, accounting for the lend and borrow rates linked to trading each of the two currencies. It takes into account all relevant information to generate the precise figure so you can work out the amount you’ll gain or lose on a forex trade.

Why should I use it?

You should use this carry trade calculator to ensure your trades will be profitable, even when taking interest rates into account. The goal of a carry trade calculator is to take a low-interest rate into account and figure out the point at which you stand to make a profit. 

What is a carry trade? 

A carry trade is a trading strategy that involves borrowing at a low-interest rate and investing in an asset that provides a higher rate of return. Carry trading is most commonly undertaken when investing in forex markets.

The foreign exchange market (forex) is a global market where world currencies are traded for each other, in the form of currency pairs like EUR/USD or GBP/USD. The forex market is responsible for setting foreign exchange rates for every currency in the world. Traders use forex brokers to either buy or sell different currencies, with the goal of making a profit if the currency they’re trading moves in the direction they’ve predicted.

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.