Carry (of an asset)

The carry of an asset refers to the benefit (If positive) or cost (if negative) of holding it. Commodities invariably have negative carry, given storage costs. As do credit default swaps, for example, as buyers of credit protection pay out to the seller and only benefit if a credit event around the hedged assets is triggered. Bonds, by contrast, may have positive or negative carry as they accrue interest from day one, experience the price approaching par at maturity and also see changes of yield due to reduction in maturity as time passes (with a constant yield curve)