This is the interest cost of holding an asset for a period of time. It is either the cost of funds to finance the purchase (real cost), or the loss of income because funds are diverted from one investment to another (opportunity cost).
The costs incurred in buying an asset today and carrying it through to the delivery day of a future. Such costs may include finance costs, insurance, storage etc. and will be reduced by the benefits of holding certain assets such as dividends and coupons.
Expenses incurred while a position is being held; for example, interest on securities bought on margin, dividends paid on short positions, and other expenses.
The difference between the cost of borrowing money and the yield which the investment offers.
The cost associated with borrowing money in order to maintain a position. It is based on the interest parity, which determines the forward price.
The cost, often quoted in terms of dollars or pips per day, of holding an open position.
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.
The interest intrinsic in our share futures prices, excluding any dividends payable during the contract period
The interest rate parity, where the forward price is determined by the cost of borrowing money in order to hold the position.
When an investor borrows money to sustain a position. There is a cost for borrowing derived from the interest parity condition, which is used to determine the forward price.
For physical commodities such as grains and metals, the cost of storage space, insurance, and finance charges incurred by holding a physical commodity. In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of funds necessary to buy the instrument.
See on: Wikipedia Investopedia Costs incurred because of an investment position.
The cost of carry is the lost opportunity cost of purchasing a particular security rather than an alternative. For most investments, the cost of carry generally refers to the risk-free interest rate that could be earned by investing currency in a theoretically safe investment vehicle such as a money market account minus any future cash-flows that are expected from holding an equivalent instrument with the same risk (generally expressed in percentage terms and called the convenience yield). Storage costs (generally expressed as a percentage of the spot price) should be added to the cost of carry for physical commodities such as corn, wheat, or gold.