Carry Agreement Deutsch
The cost of transportation is an expense that has the potential to influence your bottom line. As a result, you should be aware of any transportation costs you may incur during the trade, as this will affect the net return on your trades or investments. Cash and carry trading is an arbitrage strategy that exploits the misjudgments between the underlying and its corresponding derivative. The key to profitability is the final correction of this misvaluation. For raw materials, there may be costs of transport, storage and asset insurance, provided that a trader takes over the ownership of the goods on which he decides. Cash and carry trading (sometimes only called “carry trade”) is a business strategy that an investor can use to take advantage of market price differences. It usually includes a long position on a security or commodity, while selling the associated derivative, such as shorting of a futures or options contract. The cost of transportation is the amount of extra money you might have to spend to keep a position. This can take the form of day-to-day fees, interest payments on marginal accounts and foreign currency transactions, or storage fees for goods when a futures contract is delivered.
Private equity (or simply “carry”) is a compensation for the performance received by the partners of a private equity fund when they exceed a certain threshold return. This compensation is intended to direct private lenders to their investors, since most of their remuneration comes from the carry. Also known as the outperformance tax, it sets a certain threshold of return on investment to hit the fund (say 10%) then gives private equines one percent (usually 20%) Returns above the threshold. Forex and commodities are the main markets affected by transportation costs, but financial products such as derivatives may also be affected. For each of these costs, the costs are different. Forex transactions may be subject to fees and fees, for example. B on a day-to-day basis, if the interest rate changes. For futures contracts, a specific calculation is required to calculate transport costs. Futures contracts include the cost of storing the product in question as well as the risk-free interest rate – the return on an investment that has no risk of financial losses. This is a hypothetical concept, because all trades and investments carry a certain risk of loss, no matter how negligible it may be. However, for practical purposes, the interest rate on a low-risk government loan is often used. The warranty or merchandise to be acquired is retained until the date of delivery of the contract and is used to cover the commitment of the short position.
By selling a futures contract, the investor has taken a short position and knows how much on the delivery date and the cost of the warranty are realized because of the “long position” component of the cash and carry trade.