Cost of Carry
a.k.a. Carrying cost
The total cost of holding a position over time: financing, storage and insurance, minus any income it earns.
In plain English
The total cost of holding a position over time: financing, storage and insurance, minus any income it earns.
The cost of carry is the bill for keeping a position open. For a barrel of oil, that is storage and insurance. For a currency position, it is the interest you pay or earn, which shows up as swap or rollover.
It explains why futures and forward prices differ from spot prices: the gap reflects what it costs to carry the asset until the delivery date.
Keep this word for good
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