positive carry

Positive carry

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Positive Carry

A situation in which an investor has two opposite positions and in which the cash inflow from one position exceeds the cash outflow of the other. For example, if one borrows money, owes 10% interest, and then promptly lends the same amount of money at 12% interest, then the borrower/lender has a positive carry.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

positive carry

The current net income from an investment position when the current income from the investment exceeds its cost of carry. A Treasury bond with a current yield of 14% has a positive carry if its purchase can be financed at 12%. Compare negative carry. See also carrying charges.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
While high-quality bonds will almost never give you a dramatic spike like short stock or long volatility holdings can, in addition to having a low to negative correlation with stocks, bonds offer the significant advantage of positive carry (i.e.
This is due to rent substitution as far as the end-user is concerned and for any positive carry that the investor can accrue in terms of rental yields.
He added the dividend yield from Toyota would also give GT Capital 'positive carry,' which means the conglomerate expected greater cash inflow from this investment than the cost of servicing the debt incurred.
Opportunistic because TMC announced a share buy back program last month and thus it is timely to take a position...The dividend yield also gives a positive carry,' GT Capital president Carmelo Bautista said.
"As a non-yielding asset, it has a minimal storage cost, so when you compare it to negative-yielding assets, it actually has a positive carry."
Second, we need to keep in mind that sovereign securities perform a well-defined function in banks' business activities, as they provide liquidity and hedging services for banks while guaranteeing some positive carry, at least in Spain.
"Gold has a positive carry compared to negative interest rates," said Osborne.
"Unlike the currency options/volatility market, the Fx forward market is also used for genuine corporate hedging and banking sector access to foreign liquidity (while currently earning a positive carry).
When we get closer to our cost of deposits in US dollars, then our customers will start to require more interest, so [the banks' advantage from the interest rate developments] will probably be 80 percent [of the total] benefit for us, and then 70 percent, then 60 and 50; but there will always still be a positive carry on our deposits, after all those accumulated negative carries."
The people working at these funds will also tell you they like the "positive carry" the fact that the cost of borrowing here is less than the yield on the investment, which means that by borrowing you can increase your returns while still keeping your cash flow positive].
"Now that the rental market is better, it would be wrong to penalize the sponsor who can now rent them and have a positive carry."

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