Carry Trade Calculator - FX Interest Return

Estimate FX carry trade return from interest-rate differential, leverage, position size, holding period, and currency price movement.

Enter rates, leverage, and FX movement to estimate carry income and total carry trade profit.

Carry Trade Calculator - FX Interest Return
Estimate FX carry trade return from interest-rate differential, leverage, position size, holding period, and currency price movement.

Enter rates, leverage, and FX movement to estimate carry income and total carry trade profit.

About the Carry Trade Calculator

The carry trade calculator estimates interest carry, exchange-rate gain or loss, total profit, and return on capital for a currency carry trade. A carry trade borrows or funds in a lower-yielding currency and invests in a higher-yielding currency. The strategy can earn interest differential, but exchange-rate movement can quickly overwhelm the carry, especially when leverage is used. The formula is: total carry trade profit = position x (investment rate - funding rate) x days / 365 + position x FX price change; return on capital = profit / (position / leverage) x 100. The calculator separates interest carry from FX gain or loss so users can see whether profit comes from yield differential or currency movement. Leverage does not change dollar profit on the entered position, but it changes return on capital because less margin capital supports the same notional exposure. Use the calculator for FX scenario analysis, macro trade education, and risk checks before comparing broker quotes. It can show, for example, that a positive annual rate differential over 90 days may be erased by a small adverse currency move. It is also useful for stress testing leverage: higher leverage magnifies return on capital, but it also magnifies losses and liquidation risk. The estimate is simplified. It does not include bid/ask spreads, rollover conventions, day-count differences, broker financing spreads, margin calls, taxes, compounding, or path-dependent exchange-rate movement. For live trading, compare the output with broker swap rates and risk limits, and model adverse FX moves as carefully as favorable carry. For best results, keep all inputs on the same time basis and currency basis, then save the assumptions beside the output. That practice makes the estimate easier to audit later and prevents a common spreadsheet error: mixing monthly values with annual values or combining before-tax and after-tax figures. Re-run the scenario with conservative and optimistic assumptions before using the result in a budget, filing decision, trade review, or transaction memo.

Carry Trade Examples

These worked examples use the displayed formula exactly, with real inputs and the displayed primary result.

FX scenarioTotal profitCarry note
Position Size: 100000, Funding Currency Rate (%): 1, Investment Currency Rate (%): 5, Leverage: 2, Holding Period (Days): 90, FX Price Change (%): 1$1,986.30About $986.30 of interest carry plus a $1,000 FX gain produces the total profit.
Position Size: 200000, Funding Currency Rate (%): 2, Investment Currency Rate (%): 6, Leverage: 4, Holding Period (Days): 180, FX Price Change (%): -3-$2,054.79Positive carry is more than offset by a 3% adverse currency move.
Position Size: 50000, Funding Currency Rate (%): 0.5, Investment Currency Rate (%): 3.5, Leverage: 5, Holding Period (Days): 120, FX Price Change (%): 0$493.15With no FX move, the result is purely the annualized rate differential prorated for 120 days.

How to Use the Carry Trade Calculator

  1. Enter the notional position size.
  2. Enter funding and investment currency interest rates.
  3. Enter leverage and holding period.
  4. Add expected exchange-rate change for the target currency.
  5. Click Calculate Carry Trade to see carry, FX impact, and return on capital.

Carry Trade Calculator FAQ

What is carry in FX trading?
Carry is the interest-rate differential earned or paid from holding one currency funded by another. Positive carry occurs when the bought currency yields more than the funding currency.
Why include leverage?
Leverage changes return on capital because the margin capital is smaller than the notional position. It also magnifies risk and potential loss.
Can FX movement wipe out carry?
Yes. Currency depreciation can quickly exceed interest income, especially with leverage or volatile exchange rates.
Does this include broker swaps?
No. Brokers may apply swap points, spreads, financing charges, and rollover rules that differ from simple rate differentials.
What is return on capital?
It is total profit divided by estimated margin capital, where margin capital equals position size divided by leverage. This percentage can look large because leverage reduces the denominator and increases loss risk.