Understanding Cost of Carry

A future Contract is an agreement between two parties to BUY or SELL an underlying asset, including stocks, indices,commoditities or currency, at a certain time in the future at a certain price. Futures contracts are standardized and are traded on the exchange. To facilitate liquidity in futures contracts, the exchange defines certain standard specifications for  a particular contract , including a standard underlying instrument, a standard quantity and quality of that underlying assest ( to be delivered or cash settled), and a standard timing for such a settlement.  If you have taken position in equity futures, whether long or short, you have to close the position by entering in an equal and opposite

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