Definition of CARRY in Finance

The carry of any asset is the cost or benefit of owning that asset. For example oil would have a negative carry as it requires storage, but a bond would have a positive carry as it pays interest.

There are many strategies involving a carry, for example:

  • A mortgage originator borrows money in the wholesale markets at a rate of 3%
  • The originator then lends that money out to homeowners at a rate of 6%
  • The originator has made a profit of 3% on the carry

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