Definition of CARRY in Finance

The carry of any asset is the cost or benefit of owning that asset. For example oil would have a negative carry as it requires storage, but a bond would have a positive carry as it pays interest.

There are many strategies involving a carry, for example:

• A mortgage originator borrows money in the wholesale markets at a rate of 3%
• The originator then lends that money out to homeowners at a rate of 6%
• The originator has made a profit of 3% on the carry