Cost Of Carry
Costs incurred as a result of an investment position. These costs can include financial costs, such as the interest costs on bonds, interest expenses on margin accounts and interest on loans used to purchase a security, and economic costs, such as the opportunity costs associated with taking the initial position. Investopedia Says:
Cost to carry may not be an extremely high financial cost if it is effectively managed. For example, the longer a position is made on the margin, the more interest payments will need to be made on the account. Consideration must be given to all of the potential costs associated with taking a position. Related Terms:
Economic Profit (or Loss)
Economic Value Added - EVA
Full Carry
Margin Account
Opportunity Cost |