1. In Banking, this occurs when income earned from a loan is less than the bank’s fund costs. Also known as negative cost of carry. 2. In Borrowing, this occurs when fund costs exceeds fund income obtained. Also known as reverse leverage. 3. In Securities trading, this occurs when securities’ income earned is less than fund cost borrowed to purchase them.

More On This Topic

Link to This Definition
Did you find this definition of NEGATIVE CARRY helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary