A carry trade is a strategy that involves simultaneous low-interest-rate borrowing and investing in a high-rate-of-return crypto asset. It is most commonly employed in forex trading, where traders might borrow and convert a low-interest-rate currency into a high-interest-rate currency — but proceeds could (in the crypto market’s case) be deposited into crypto-denominated assets.
Carry trades are high-risk strategies due to the risk of price declines and implicit risk associated with investing with borrowed funds. This makes carry trades primarily appropriate only for highly skilled and/or institutional investors with very-high risk tolerances.
A common example of a carry trade would be an individual accepting a 0% cash advance in order to invest in cryptocurrencies — an extremely high-risk strategy.
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Source: https://www.okx.com/academy/en/carry-trades