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General TradingC
Cost of Carry
The Cost of Carry refers to the total costs associated with holding a trading position or storing a commodity over time, including interest charges, storage fees, insurance, and foregone dividends or opportunity costs. It is a key factor in determining the difference between futures and spot prices.
Example
“The gold futures premium over spot was largely explained by the cost of carry, which included storage fees at the vault and the financing cost of tying up capital.”