Net financing cost

Net financing cost

Also called the cost of carry or, simply carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.

Net Financing Cost

1. In interest rate futures, the difference between the cost of purchasing an instrument and its yield. See also: Profit, Loss.

2. Fees a firm charges for making a loan. The largest single net financing cost is the interest, but it also includes charges such as an origination fee or an application fee. See also: All-in cost.