Cash and Carry Transaction

Definition of 'Cash and Carry Transaction'


A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.

Investopedia explains 'Cash and Carry Transaction'


The carrying costs in a cash and carry transaction are not deductible if the underlying commodity or security is part of a balanced position. These costs are instead capitalized and added to the basis.



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