Carrying Charge
Carrying charge, or cost of carry, refers to the expenses associated with holding or maintaining an asset or financial instrument over time. These costs can include storage fees, insurance, financing costs, and other expenses required to keep the asset in good condition. In the context of commodities, for example, the carrying charge could cover storage fees and insurance for holding physical goods. If these costs become too high, they may reduce or even eliminate the potential returns from the asset. Investors should evaluate the cost of carry to determine if it's worthwhile to hold onto the asset or if it should be sold.
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