When can a negative carry happen in commodities?
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mal
Apprentice
Joined: 20 Feb 2006
Posts: 7
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 Posted: 07/23/08 - 06:42 Post subject: |
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| I have understood that it is possible for a negative carry to occur when it comes to commodities. Can you say something more about when this can happen? As I don't really have any idea of how that may work, explanations in plain English with no jargon would be great. |
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emile
Apprentice
Joined: 11 May 2005
Posts: 3
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| Posted: 08/22/08 - 03:25 Post subject: |
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| Sure, many commodities in shops have a negative carry! This is due to the fact that paying for their storage is expensive, and before that are distributed and sold, they have been sucking money already. However this is supposed to be solved after the commodity is sold, which is when the costs are recovered. |
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