Cost of carry definition

The cost of maintaining an investment position is often referred to as the cost of carry or carrying charge. It can come in many forms, including interest on margins or the loans used to make the trade, or the cost of storage and insurance associated with holding a commodity.

In forex, for example, there are several costs that can arise from keeping a position open. Changes in interest rates can necessitate a charge on your account, or overnight funding charges can be incurred. Often, the cost of carry will already be included in the price of opening a new position.

The cost of carry of a position varies depending on the type of trade and asset being traded. 

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