Personal Finance & Money Asked by Trevor Wierzbowski on September 26, 2021
Say investor B has a gold bar, and must pay 1 dollar per day to store it. Investor A shorts gold, borrowing the gold bar from B, and selling it to investor C.
What I want to know is, what happens to the cost of carry here? Who pays it? Since investor C bought a bar of gold and doesn’t care whether it was from a short sell or not, they should certainly be paying a cost of carry to store their gold. Should B then pay the cost of carry to A then, since it’s kind of like the opposite of a dividend?
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