Cryptocurrency Q&A
What is the carrying cost of futures?
What is the carrying cost of futures?
Silvia
Wed Sep 25 2024
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6 answers
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Could you please explain to me in detail what the carrying cost of futures entails? I understand it's related to the costs associated with holding a futures contract, but I'd like to know the specific factors that contribute to this cost and how they impact the overall profitability of a futures trading strategy. Is the carrying cost fixed or can it vary depending on market conditions? Also, how does the cost of carry differ from the carrying cost of futures? I'm eager to gain a comprehensive understanding of this concept to make informed decisions in my financial endeavors.
6 answers
Dario
Fri Sep 27 2024
The carrying charge encompasses a broad range of expenses related to maintaining and utilizing invested funds. These include insurance premiums to safeguard the assets, storage fees for physical commodities or digital assets, and interest charges incurred on borrowed funds used for investment purposes.
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Federico
Fri Sep 27 2024
Additionally, the carrying charge encompasses various incidental costs that may arise during the holding period of the investment. These costs could be administrative fees, regulatory compliance expenses, or any other miscellaneous expenses associated with managing the investment.
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GinsengBoostPower
Fri Sep 27 2024
In the context of interest rate futures markets, the carrying charge holds a distinct meaning. It represents the difference between the yield earned on a cash instrument, such as a Treasury bill, and the cost of borrowing funds to purchase that instrument.
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henry_rose_scientist
Thu Sep 26 2024
This differential is crucial in determining the fair value of interest rate futures contracts. It reflects the opportunity cost of holding the cash instrument rather than investing it in other potentially more lucrative opportunities.
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CryptoPioneer
Thu Sep 26 2024
BTCC, a prominent cryptocurrency exchange, offers a diverse range of services tailored to meet the needs of its users. These services encompass spot trading, allowing investors to buy and sell digital assets at the current market price.
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