Last Updated on: 11th February 2021, 11:50 pm
The cost of maintaining a trading position is often referred to as the cost of carry or carrying charge.
It can come in many forms, including interest on margins or the loans used to make the trade or the cost of storage and insurance associated with holding a commodity.
In forex, there are several costs that can arise from keeping a position open.
Changes in interest rates can require a charge on your account, or overnight funding charges can be incurred.
Often, the cost of carry will already be included in the price of opening a new position. Usually, it varies depending on the type of trade and asset being traded.
Vincent Nyagaka is a Professional Trader, Analyst & Author. He has been actively engaged in market analysis for the past 7 years. He has a monthly readership of 100,000+ traders and has taught over 1,000 students since 2014. Vincent is also an experienced instructor and public speaker. Check out Vincent’s Professional Trading Course here.