cost of carry investment & finance definition
The
net cost of holding a cash market position. For physical commodities, cost of
carry includes storage costs, insurance costs, transportation costs, and any
interest paid to purchase the goods. For financial transactions, cost of carry
is limited to any interest charges incurred to hold onto the position, as well
as any opportunity cost that might be incurred.
See cost of carry in Wall Street Words
Direct costs paid by an investor to maintain a security position. For example, an individual purchasing securities on margin must pay interest expenses on borrowed funds. Likewise, an investor selling stock short is responsible for making dividend payments to the buyer. Also called carrying charges.
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