A situation that arises when the cost of financing a financial instrument or a physical asset, such as short-term rate of interest, insurance costs, and storage costs, is lower than the current return of that financial instrument or physical asset.
In the context of financial futures, such as stock index futures, positive carry results when yields exceed short-term interest rates. In which case, the dividend payout from holding and carrying the financial asset (e.g., stocks) is more than the cost of financing.
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