Negative Carry

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Negative carry

Related: Net financing cost

Negative Carry

A situation in which an investment has a lower yield than the cost of funding for it. For example, an investor may borrow money at 6% interest to invest in a restaurant with only a 4% yield. In this case, the investor has a negative carry of 2% and is actually spending money to invest in the restaurant. One may think of a negative carry as a bad investment, but it sometimes results in a net profit if the interest on the cost of funding is tax deductible and the investment itself is a tax free security, such as a municipal bond.

negative carry

The net cost of an investment position when the investment's cost of carry exceeds its current income. For example, buying a bond with a current yield of 10% and financing the purchase with money borrowed at 13% will result in a negative carry. Compare positive carry. See also carrying charges.

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Net Financing Cost Positive Carry			MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES The weaker than expected earnings out from Morgan Stanley this morning have not helped to bolster investor sentiment with negative carry benefiting on the elevated risk aversion. Sentiment Improves into London Fix (Midday Snapshot) by Mena Report All the words that come out of your mouth should be carefully planned in order not to come along with negative carry because this can damage your relationship for good. Communication - Paying Attention to the Words That Come Out of Your ... by Daniel Kertcher / Relationships community Some warehouse lenders have increased their interest rates, thereby increasing the negative carry of warehoused loans. Small lender survival--Part 1: performance history and outlook; A ... by Lind, Matthew / Mortgage Banking			natural vacancy rate Natuurlijk persoon NAV NAV Arbitrage navigable line navigable waters NBC NC NCC NE Near Money Nearby Nearby Futures Contract Nearby Month Nearest Month Necessary Necessities of Life Neckline NECTAs Negative Acknowledgment negative amortization Negative Amortization Cap Negative Amortizing Mortgage Negative Authorization Negative Balance Negative Carry negative cash flow Negative Convexity Negative Covenant Negative Duration negative easement Negative Equity negative equity loans Negative Goodwill Negative Income Tax Negative Interest Rate negative leverage Negative Net Worth Negative NPV tie-in project Negative Obligation negative or positive leverage Negative Pledge Negative Pledge Clause Negative Points Negative Volume Index Negative working capital Negative Yield Curve Neglected Firm Effect Neglected-Firm Effect negligence negligent fraud			Negative averment negative axillary lymph node negative balance negative balance negative balance negative balance negative balance Negative Balances Negative Balances negative base excess negative bending moment Negative beta decay Negative beta decay Negative beta decay Negative Biased Temperature Instability Negative Big Difference Negative binomial Negative binomial distribution Negative binomial distribution Negative Binomial Importance Sampling Negative Binomial Percent Point Function Negative Binomial Probability Density Function Negative Binomial Regression Model negative booster Negative Booster Transformer Negative Burn Negative calorie diet Negative campaigning Negative campaigning Negative Carries Negative Carry Negative cash flow Negative Cash Flows negative catalysis negative catalysis Negative Channel Field Effect Transistor Negative Channel Transition negative charge negative charge Negative Chemical Ionization Mass Spectrometry negative chemotaxis Negative Christmas Event Negative Cofactor 2 negative comments on judge okay? Negative Component negative compulsion Negative concord Negative condition negative conductor Negative consequentialism Negative consequentialism Negative Constructive negative contrast negative contrast negative contrast negative contrast Negative Contrast Electron Microscopy negative convergence negative convergence negative convergence negative convergence

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