Cost of carry

Cost of Carry
The 'Cost of Carry' (or carry costs) is the total cost of storage, insurance and financing costs that a seller of a futures contract must bear while waiting to deliver the asset that the buyer has purchased from the seller.

cost of carry
out-of-pocket costs incurred while an investor has an investment position, among them interest on long positions in margin accounts, dividends lost on short margin positions, and incidental expenses.
Dictionary of Business Terms ...

Cost of Carry
The cost associated with borrowing money in order to maintain a position. It is based on the interest parity, which determines the forward price.
Cost of Tender ...

cost of carry
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.

Cost Of Carry
Costs incurred as a result of an investment position. These costs can include financial costs, such as the interest costs on bonds, interest expenses on margin accounts and interest on loans used to purchase a security, ...

Cost of carry Related:
Counterparties The parties to an .
Counterparty risk The risk that the other party to an agreement will default. In an options contract, the risk to the buyer that the will not buy or sell the underlying as agreed.

Cost of carry
Used in the context of general equities. 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, ...

Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield.

the total variable cost of carrying one unit of
inventory in stock for one year; includes the opportunity
cost of the capital invested in inventory
Carrying cost ...

Combination of a long position in a stock/index/commodity and short position in the underlying future, whereby a cost of carry exists on the long position.

Also called the theoretical futures price, which equals the spot price continuously compounded at the cost of carry rate for some time interval.

Net financing cost Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield.

Definition: [crh] Also called the cost of carry or, simply carry, the difference between the cost of financing the Definition: purchase"purchase of an asset and the asset's cash yield.

intent to profit from increase in its value, and the taxpayer also engages in farming on such land, the farming and the holding of the land will ordinarily be considered a single activity only if the farming activity reduces the net cost of carrying ...

Forward prices are obtained by taking the spot price and adding to it the cost of carry, which is the storage cost and the interest foregone minus any convenience yield or dividend/interest paid on the underlying instrument.

A formula that calculates the optimum quantity to be purchased (or produced) so as to minimize the combined total cost of carrying inventory and processing additional purchase orders (or production setups).

Futures contracts: the theoretical futures price obtained by continuously compounding the Spot Price at the Cost of Carry rate for some time interval. It is an equilibrium price and any discrepancy would be closed by arbitrage.

flag vessels exceeds the cost of carrying the same amount on foreign flag vessels. When applied to agricultural commodities shipped under Food for Peace, OFD is the amount paid by the Commodity Credit Corporation.

Annual Percentage Rate (APR) The cost of carrying a balance on a loan expressed as an annual percentage. To calculate the amount owed in interest each month divide the APR by 12. For example, if the APR is 18% the monthly rate is 1.5%.

Carry basis is the theoretical price of the future, minus the spot price of the underlying asset, and is equal to the net cost of carry. Value or excess basis is the difference between the theoretical price of the future and its market price.

Applies to derivative products. Combination of a long position in a stock/index/commodity and short position in the underlying futures, which entails a cost of carry on the long position.
Cash commodity ...

For instance, there is typically a spread between the price of the October wheat futures contract and the January wheat futures contract. Part of that spread is known as the cost of carry.

option-adjusted spread, or the extra yield demanded by the security holder to compensate for the mortgage repayment option;
current-coupon spread
volatilities
convexity
cost of carry ...

Cost of carry Related: Net financing cost Cost of funds Interest rate associated with borrowing money. Cost of lease financing A lease's internal rate of return.

cost of carry "The expenses borne while a position is being held; for example, interest on... cost of debt capital "The interest rate a firm is paying on all of its debt, such as loans and bonds.

See also: Expense, Convertible security, Spot price, Saving, Values