Join Kathy Lien, renowned author and expert on Forex, as she discusses some important carry trade strategies for forex options. The currency carry trade strategy has generated positive returns since the 1980s, but only in recent years has it received much media attention. For those of you who are still befuddled by what a carry trade is and why the hysteria surrounding the trade has extended beyond the currency market, welcome to Carry Trades 101. We will explore how a carry trade is structured, when it works, when it doesn't and the different ways that short- and long-term investors can apply the strategy. The carry trade is one of the most popular trading strategies in the currency market. Mechanically, putting on a carry trade involves nothing more than buying a high yielding currency and funding it with a low yielding currency, similar to the adage "buy low, sell high."

The carry trade is a long-term strategy that is far more suitable for investors than traders because investors will revel in the fact that they will only need to check price quotes a few times a week rather than a few times a day. True carry traders, including the leading banks on Wall Street, will hold their positions for months (if not years) at a time. The cornerstone of the carry trade strategy is to get paid while you wait, so waiting is actually a good thing. Partly due to the demand for carry trades, trends in the currency market are strong and directional. This is important for short-term traders as well because, in a currency pair where the interest rate differential is very significant, it may be far more profitable to look for opportunities to buy on dips in the direction of the carry than to try to fade it.

Learn to trade your views on the strength or weakness of the U.S. dollar. FX Options provide you with exposure to rate movements in the global foreign currency market and can be easily traded through all options-enabled brokerage accounts. These exchange listed securities are cash-settled in U.S. dollars and have a European style exercise.

Kathy Lien is the Chief Currency Strategist at DailyFX.com, one of the leading resources for online FX news and research. Kathy is also one of the authors of Investopedia’s Forex Education section and has written for the Asia Times Online, MarketWatch, Stocks & Commodities Magazine, ActiveTrader Magazine, Futures Magazine and SFO. She is frequently quoted by Bloomberg, Reuters, the Wall Street Journal, and the International Herald Tribune and has appeared on CNN, CNBC, CBS and Bloomberg Radio. She is also an internationally published author of Day Trading the Currency Market (Wiley), which has been translated into Chinese, Russian, Japanese and Spanish. Trade your views on the strength or weakness of the U.S. dollar. FX Options provide you with exposure to rate movements in the global foreign currency market and can be easily traded through all options-enabled brokerage accounts. These exchange listed securities are cash-settled in U.S. dollars and have a European style exercise.

Steve Meizinger is Director of Education at the International Securities Exchange (ISE), which operates a family of innovative securities markets. Steve is a prominent and leading expert in Forex, equity, and index options trading. Steve has led hundreds of seminars for thousands of retail investors over the years. In addition to being a top rated instructor for the ISE and the Options Industry Council, Steve also speaks to the trading community at key industry conferences and events. Steve helps investors navigate the market by sharing his vast trading experience and deep insight into the marketplace, allowing them to identify the most appropriate trading strategies. Steve also has over twenty years experience as an Options Specialist at several leading exchanges, including the NYSE, PHLX and AMEX.