How are covered and uncovered interest rate parity different?
When there is interest rate parity, there are no abnormal return opportunities, as there is equilibrium in the market. As such, it is the absence of the parity (i.e. there is a mispricing) that allows for arbitrage.
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In covered interest rate parity, as the name says, your position is covered, i.e. in the case of mispricing, you confirm all the relevant trades in the present even if some take place in the future, so you know all your future cash flows and therefore profit you will make is risk free.
In an uncovered position, prices are such that, if they remain unchanged, you will be able to make a profit, but your position is open (or uncovered) so it is possible that between now and the future point in time at which the profit will be made, prices will correct to eliminate the profit opportunity or even reverse and lead to a loss.