Why it matters
Carry can help or hurt depending on direction and funding conditions.
Operational use: this is how the market taxes urgency. When it appears, slow down or size down.
Common trap
Ignoring carry/financing and being surprised by slow P&L bleed.
Example
Holding a currency pair with negative carry costs you daily.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Carry is not free. It’s priced, and it can reverse under stress.
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.