Cost of carry

Definition:

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.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Regulation U

Federal Reserve Board limit on how much credit a bank can allow a customer for the purchase and carrying of margin securities.

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