Cost of carry & implied convenience yield calculator

Fair futures value, contango reading.

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.
• Carbon Allowances — A commodity invented by law: the right to emit one tonne of CO2, made scarce on purpose and tradable by design.
• 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.

More calculators from Commodities

• Fuel switching & the carbon price — where gas undercuts coal.
• 3-2-1 crack spread — the refinery margin as a number.
• Cash-and-carry against the futures price — what sets the shape of a commodity curve.
• Degree-day contract settlement — how a weather derivative pays out.

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