Carry Trade Calculator
Model borrowing the quote currency to fund a base-currency investment. Defaults are hypothetical examples, not current policy rates or broker swap quotes. All cash results use the quote currency, and costs are excluded.
Currency Pair & Interest Rates
Position Settings
Units of AUD; no leverage or margin assumption
JPY per 1 AUD
Exchange Rate Scenario
Positive = AUD appreciates vs JPY
Positive modeled carry at unchanged FX
Per day
Holding period
FX change for zero modeled P&L
Not return on margin
Manual assumptions, no rate feed
The initial 4% investment rate, 1% borrowing rate and 100 quote units per base unit are examples. Changing a currency does not load current rates. Enter rates and FX assumptions appropriate to your scenario.
This simple-interest funding model does not reproduce a retail broker's rollover ledger. No spread, commission, tax, margin, compounding, weekend multiplier or holiday schedule is included.
Follow both currency cash flows
Let N be the invested base-currency units, S the starting quote-currency units per base unit, t the holding days divided by 365, rL the investment rate, rS the borrowing rate, and x the fractional change in the exchange rate. Rates are converted from percentages to fractions.
The model borrows N × S quote units and invests N base units. At the horizon, the investment is N × (1 + rL × t) base units and the debt is N × S × (1 + rS × t) quote units. Converting the investment at S × (1 + x) and repaying the debt gives:
P&L in quote currency = N × S × [(1 + rL × t) × (1 + x) − (1 + rS × t)]
At unchanged FX, carry is N × S × (rL − rS) × t. The daily number is this constant-rate contribution divided by the holding days; it is not a promised daily cash payment. The FX contribution also converts the base-currency interest, so it is not just the original principal times the FX move.
Break-even is a cash-flow identity
Break-even FX change = [(1 + rS × t) / (1 + rL × t) − 1] × 100%
For the hypothetical 4% versus 1% rates over 365 days, the break-even change is about −2.8846%, not −3%. With N = 100,000 and S = 100, unchanged-FX carry is 300,000 quote units. If the quote currency is JPY, that is JPY 300,000, not USD 3,000.
Broker financing uses a different contract
Retail FX financing can depend on position direction, instrument, account currency, administrative charges and settlement dates. For example, OANDA Corporation's financing documentation describes separate buy/sell funding rates and weekend or holiday adjustments. Check the terms for your own broker and account jurisdiction; a central-bank rate difference is not a quoted swap rate.
What this scenario cannot establish
Positive modeled carry does not guarantee a positive return. Exchange-rate losses can exceed interest income, and leverage can increase losses relative to deposited margin. This page does not model margin calls, liquidity, rate changes, credit risk or transaction costs. Currency choices are labels, not a ranking or recommendation.
Frequently Asked Questions
Are the initial rates current central-bank rates?
No. The 4% and 1% defaults are illustrative inputs with no live data connection. Currency selection does not fetch market or policy rates. Supply your own assumptions and verify their period and basis.
Which currency are the results in?
Every cash result is in the short or quote currency shown before the amount. The starting exchange rate is quote units per one long or base unit. There is no conversion to a separate account currency.
Can this predict the swap credited by my broker?
No. This page models a separately funded investment with simple interest on a 365-day basis. Broker long/short swap quotes, fees, account-currency conversions and settlement calendars can produce different amounts.
Why is break-even not simply the rate differential?
Both the base investment and quote debt accrue interest. The final FX rate converts the base principal plus its interest, so break-even is the ratio of the two accrued balances. The displayed formula includes this interaction.
Does the annual rate difference show return on my margin?
No. It is only the difference between the entered annual rates. Leverage and deposited margin are not inputs, so no return on equity, liquidation threshold or margin requirement is calculated.
What happens when I reverse or change the pair?
The unit-dependent size, starting FX rate and FX-change inputs are cleared to avoid reusing values in the wrong currency orientation. Reversing swaps the two entered rates; selecting a new currency clears its rate.
Review Position Sizing Separately
Carry and FX assumptions do not set an appropriate risk budget. Compare position sizing separately and confirm your broker's contract units, funding schedule and margin requirements.