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Carry Trade Return Calculator

Work out carry trade return instantly with clear inputs, formula shown and shareable results.

About Carry Trade Return Calculator

A carry trade borrows in a low-rate currency to invest in a high-rate one, earning the rate differential. Leverage multiplies the carry, but the break-even shows how small a currency move erases a year's income — which is why carry trades unwind violently.

Formula

Carry trade

Carry = high rate - funding rate; return on equity = carry × leverage

Worked example

With the default values below, Carry Trade Return Calculator returns Return On Capital Employed of 19.500%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Notional Positionminimum 0
1,000,000
Interest Rate On The Long Currencyaccepts 0–100 %
9 %
Funding Rate On The Short Currencyaccepts 0–100 %
2.5 %
Leverageaccepts 1–50
3

Results

Return On Capital Employed
19.500%
Interest Rate Carry
6.500%
Annual Carry Income
$65,000.00
Currency Move That Wipes Out The Carry
6.500%

Step by step

  1. 1Values used
  2. 2Carry trade
  3. 3Return On Capital Employed= 19.500
  4. 4Interest Rate Carry= 6.500
  5. 5Annual Carry Income= 65,000.00
  6. 6Currency Move That Wipes Out The Carry= 6.500

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.

Frequently Asked Questions

Why do carry trades fail so suddenly?

Because the high-rate currency often weakens exactly when risk appetite falls, and leverage turns a modest move into a full loss.

Does uncovered interest parity predict this?

In theory the carry should be offset by depreciation. In practice it often is not, until it abruptly is.

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Carry Trade Return Calculator | Calcrivo