How the Little Known Carry Trade Is Destroying the Market Today
There's panic on Wall Street and around the world today, and it's not bad economic news or a terrible earnings report that's at fault. Instead, it's a highly leveraged yen "carry trade" that has led to billions of dollars in selling and liquidations starting in the crypto market on Sunday night.
Very few assets are up today, but the notable moves are the S 500 (SNPINDEX: ^GSPC) falling 2.99% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) losing 3.7% as of 10:00 a.m. ET. Growth stocks have taken a nosedive with many down double digits.
Hedge funds and other large institutional traders have put on what's known as the yen carry trade. It works like this:
Source Fool.com
