negative carry

negative carry definition - business

negative carry

The net cost of an investment position when the investment's cost of carry exceeds its current income. For example, buying a bond with a current yield of 6% and financing the purchase with money borrowed at 7% will result in a negative carry. Compare positive carry. See also carrying charge 1, carry trade.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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