cost of carry


cost of carry
(or carry) For physical commodities such as grains and metals, the cost of storage space, insurance, and finance charges incurred by holding a physical commodity. In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of funds necessary to buy the instrument. Chicago Board of Trade glossary
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The cost of financing an asset. If the cost of carry is smaller than the interest received from the asset by the investor, the investor has a positive carry. Conversely, if the cost of carry is larger than the interest received from the asset by the investor, the investor has a negative carry. American Banker Glossary
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Out-of-pocket costs incurred while an investor has an investment position. Examples include interest on long positions in margin account, dividend lost on short margin positions, and incidental expenses. Related: net financing cost. Bloomberg Financial Dictionary
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The costs incurred in buying an asset today and carrying it through to the delivery day of a future. Such costs may include finance costs, insurance, storage etc. and will be reduced by the benefits of holding certain assets such as dividends and coupons. Dresdner Kleinwort Wasserstein financial glossary

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   The difference between the interest generated on a cash instrument such as a bond or a Treasury bill and the cost of funds to finance the position.
   ► See also Positive Carry, Negative Carry.

Financial and business terms. 2012.

Look at other dictionaries:

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