Futures

Cost of Carry

The net cost of theoretically holding an underlying asset until a Futures contract's expiry — mainly interest cost, offset by any expected dividends.

Cost of carry represents the net cost of theoretically holding the underlying asset until a Futures contract’s expiry, primarily reflecting the interest cost of capital tied up over that period, minus any dividends expected during the holding period (for stock Futures).

Theoretical Futures Price ≈ Spot Price + Cost of Carry

See the full explanation with a worked convergence example in Futures Pricing Explained: Premium, Discount, and Cost of Carry.