convenience yield - Investment & Finance Definition
A premium that is earned by people who hold a physical commodity. A convenience yield reflects the near-term scarcity of the commodity or underlying asset and it also reflects the preference that consumers have for holding the equivalent cash position. Convenience yields show up as an adjustment to the theoretical forward, or future, price of a commodity or the future contract delivery price. Sometimes convenience yields are earned by holders of a government bond that is in short supply in the repo market.