The cost of carry is generally understood to be the cost that is associated with holding on to a physical commodity for a specified period of time. Cost of carry includes storage, insurance on the physical commodity, and any funding costs incurred in acquiring and maintaining control of the commodity. The cost of carry is the cost of ‘carrying’ or holding a position. If the position is long, the cost of carry is the cost of interest paid. If the position is short, the cost of carry is the opportunity cost, the cost of purchasing a particular security rather than an alternative.