How can I calculate the roll yield in the context of digital currencies?

3 answers

• sriram BadardinniJan 27, 2024 · 2 years ago
  Calculating the roll yield for digital currencies involves considering the difference in interest rates between the two currencies in the currency pair. This difference is known as the interest rate differential. By multiplying the interest rate differential by the time remaining until the contract expires, you can determine the roll yield. It's important to note that the roll yield can be positive or negative, depending on whether the interest rate of the base currency is higher or lower than the quote currency. Additionally, factors such as market conditions and liquidity can also impact the roll yield. Overall, it's a calculation that takes into account interest rate differentials and time remaining in the contract.
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• chand basha shaik koraguntapalSep 20, 2023 · 2 years ago
  To calculate the roll yield in the context of digital currencies, you need to consider the interest rate differential between the two currencies in the currency pair. This differential reflects the cost of holding the position overnight. By multiplying the interest rate differential by the time remaining until the contract expires, you can determine the roll yield. It's important to keep in mind that the roll yield can vary depending on market conditions and the specific digital currencies involved. Additionally, factors such as transaction costs and liquidity should also be taken into consideration. Overall, calculating the roll yield requires an understanding of interest rate differentials and the time remaining in the contract.
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• prakashAug 20, 2021 · 4 years ago
  Calculating the roll yield in the context of digital currencies is similar to calculating it for other financial instruments. You need to consider the interest rate differential between the two currencies in the currency pair. This differential represents the cost or benefit of holding the position overnight. By multiplying the interest rate differential by the time remaining until the contract expires, you can determine the roll yield. It's important to note that the roll yield can be positive or negative, depending on the direction of the interest rate differential. Additionally, market conditions and liquidity can also impact the roll yield. Overall, calculating the roll yield requires an understanding of interest rate differentials and the time remaining in the contract.
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