Cost of Carry Quant Interview Guide
Cost of carry quant interview guide for spot, financing, storage, income, convenience yield, no-arbitrage, and examples.
Candidates explaining financing, storage, yield, and forward pricing.
Carry links spot and forward prices
Cost of carry explains how financing, storage, insurance, income, and convenience yield can connect spot and forward prices.
Commodities add storage constraints
Unlike many financial assets, commodities may be costly or impossible to store, and storage availability can change forward pricing materially.
Concrete example
If oil storage is scarce, the economics of buying spot and selling futures can change even when the futures curve looks attractive.
No-arbitrage has assumptions
Carry relationships rely on financing access, storage capacity, transaction costs, shorting feasibility, and delivery quality assumptions.
Common mistakes
Candidates often quote a formula without caveats. A better answer states which costs and benefits are included in carry.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.