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Carrying Charge


What does Carrying Charge mean?

Carrying charge, also known as carrying cost, means the cost or charge involved in holding any financial product or physical commodity over a period of time. This cost is a combination of interest charged on the borrowed fund, insurance, storage charges for physical goods or any other related fund.

Futures Knowledge Explains Carrying Charge

In a developed economy, the difference in the yield of Interest Rate Future and the yield on Spot is the carrying charge. In most cases, the carrying charge is a risk free return. Higher cost of carry erodes the profit margin.



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