Interest Rate Parity
Definition
A theory stating that the difference in interest rates between two countries equals the expected change in exchange rates between their currencies.
Example
Higher U.S. rates versus Japan should cause USD/JPY to appreciate. Swap (Rollover) Category: Forex Definition: The interest paid or earned for holding a forex position overnight, based on the interest rate differential of the two cur
Frequently Asked Question
What is Interest Rate Parity in trading?
A theory stating that the difference in interest rates between two countries equals the expected change in exchange rates between their currencies.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.