Cash-and-carry against the futures price calculator
In short
What sets the shape of a commodity curve.
Interactive: cash-and-carry against the futures priceMedium
- Full-carry futures price
- —
- Cost of carry
- —
- Futures minus full carry
- —
- Annualised curve slope
- —
- Reading
- —
Below full carry the gap is the convenience yield — what physical holders will pay for having the barrel rather than a claim on one. It rises when inventories are tight and goes to zero when tanks are full, which is exactly what the 2020 oil collapse demonstrated when storage itself ran out and the ceiling stopped working.
The idea behind it
This calculator belongs to Commodities, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.
Instruments it applies to
- Commodity Future — Standardised contracts on oil, gold, wheat and power — where the physical world sets its prices.
- Commodity Option — Optionality on oil, gold and grain — almost always struck on the future, not the physical.
- Commodity Swap — Fix the price of a flow: months or years of oil, gas or metal, settled in cash against published indices.
- Precious Metals Spot — Gold and silver, bought outright — the oldest financial asset, still trading like a currency without a country.
- Commodity ETC / ETP — Commodities in a brokerage account: physical metal or futures strips, wrapped as listed securities.
- Electricity Futures — Futures on the one commodity that cannot be stored — where prices go negative at noon and 100× at dinnertime.
- Weather Derivative — A contract that settles on the temperature, not on any asset. Invented so an energy company could hedge a warm winter — the purest example of a derivative with no underlying you can own.
- Freight Derivative — A forward on the cost of moving cargo by sea. The most violent price series in commodities, hedged with a contract on an index nobody can deliver.
More calculators from Commodities
- Cost of carry & implied convenience yield — fair futures value, contango reading.
- Fuel switching & the carbon price — where gas undercuts coal.
- 3-2-1 crack spread — the refinery margin as a number.
- Degree-day contract settlement — how a weather derivative pays out.