What is Cost of Carry?
Cost of carry is the total expense (or net cost) of holding an asset over a period. It includes the financing cost (interest you give up or pay to hold the position), storage cost (e.g. warehousing, insurance), and is reduced by any convenience yield—the benefit you get from holding the physical asset (e.g. use in production or scarcity premium). In futures and commodity markets, the theoretical forward price is often expressed as spot plus cost of carry (or spot compounded at the net carry rate).
How to Use This Cost of Carry Calculator
- 1
Enter spot price and risk-free rate
Type the current price of the underlying asset and the risk-free interest rate (e.g. 10-year government yield) as a percentage per year.
- 2
Add storage cost and convenience yield
Choose whether storage cost and convenience yield are entered as a percentage of spot (per year) or as an absolute amount per year. Leave convenience yield at 0 if not applicable (e.g. financial assets).
- 3
Set holding period and read results
Set the holding period in years (default 1). The calculator shows total cost of carry, cost as % of spot, and the breakdown (financing, storage, convenience yield). Use this for forward/futures valuation and arbitrage analysis.
Why Use a Cost of Carry Calculator?
Traders and analysts use cost of carry to price forwards and futures, to spot arbitrage between spot and derivatives, and to compare the economics of holding physical vs. synthetic exposure. Commodities with high storage costs or low convenience yield tend to trade in contango (forward > spot); when convenience yield is high, markets can be in backwardation (forward < spot). This calculator gives you the building blocks for that analysis with no backend—all in your browser.