One of the biggest advantages of trading exotic forex pairs is the carry - the interest rate differential between two currencies. When you h

One of the biggest advantages of trading exotic forex pairs is the carry - the interest rate differential between two currencies. When you hold a position past the daily rollover (5 PM NY time), you either earn or pay swap points based on that differential. Understanding carry is the bridge from NOVICE to INTERMEDIATE in exotic pair trading. How carry works on exotics: USD/MXN: Banxico's rate vs Fed rate. When Banxico holds at 10% and the Fed is at 4.75%, going long USD/MXN means you're short the high-yield currency - you pay carry. Going short USD/MXN lets you collect it....