Adam Iqbal on Carry Trades, Volatility and Trading Options
Macro Hive Conversations With Bilal Hafeez
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How Does Risk Premium Apply to Currencies?
Risk premium is based on something real. It's a way you can earn higher returns over time, but it's compensation for something. There's a risk there. You're beeng rewarded for something. And i guess that's why so many funds, as at managers folks and rispin stratedies, because they're aware that this is the dominant source of making ny over time. But if the dollar is ever trading cheap versus where it say, fair value is based on some sort of that, say, some pp or pep, the adjusted model you need to be buying the dollar, that that's too cheap for the dollar.
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