cost of carry

Cost of Carry

Costs incurred because of an investment position.

Notes:

For example, interest on a margin account.

See also: Full Carry, Margin Account

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Cost of carry

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.

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cost of carry

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.