negative carry

Definition

When the cost of financing an asset exceeds the income it generates, resulting in losses for every day you hold it. It's like paying more in parking fees than your car is worth.

Example Usage

The bond position has a negative carry of 200 basis points, meaning we're hemorrhaging money daily while hoping for capital appreciation.

Origin

Fixed income and currency trading terminology from mid-20th century

Fun Fact

Traders sometimes intentionally hold negative carry positions when they expect price appreciation to exceed the carrying costs—it's expensive optimism.

Source: Fixed income and derivatives trading terminology

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