--- title: "What is cost of carry, and why is Nifty futures at a" description: "Cost of carry is what it costs to hold the index to a later date, which is the interest on the money tied up less the dividends the stocks pay in that window." source_url: "https://www.rupeecase.com/learn/questions/cost-of-carry-futures-premium" --- The near month future sat above the index on almost every session in the record Near month Nifty future less the index close, in points, daily, from 1 Jul 2025 to 15 Sep 2026. Below the zero line means the future closed under the index. Source: NSE end of day data, computed by RupeeCase. As of 15 Sep 2026. Hold the Nifty basket until expiry and you pay interest on the money, while the stocks pay dividends in that window. The fair price of the future is the spot plus the interest for the days left, less the dividends that go ex before expiry. That net is the cost of carry. The chart shows the gap between the near month future and the index close, in points, over the record. In the record the future sat above the index on almost every session. That is the usual shape: the interest for the time left is larger than the dividends. The gap is in points, so the same rate gives more points when the index is at a higher level. The gap shrinks when dividends are due. Many index companies pay in a cluster of months, and a dividend that goes ex before expiry comes out of the future's price. The lowest point in the record was 3 Aug 2026, when the near future closed below the index. Dividend season can pull the gap down, but the record alone does not show the cause of any one day. A premium is not a signal about direction. It is carry at work. Interest, dividends and demand for the future all move the basis, and the figure does not say which one moved it. The deeper pages listed below cover the basis, the carry and the rollover in more detail. **Before you trade.** Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. [Read the SEBI study](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) What is cost of carry, and why is Nifty futures at a premium?Cost of carry is what it costs to hold the index to a later date, which is the interest on the money tied up less the dividends the stocks pay in that window, so the future is priced above spot by that net cost for the time left. Dividends that go ex before expiry reduce the carry, which is why the premium can shrink or turn into a discount when dividends fall before expiry. LGo deeper ## Where Learn teaches this. [Go deeperWhy futures trade above spot: basis, carry and convergence8 min, Beginner](/learn/path-13/module-13-2-futures-basis-and-carry)[Go deeperRollover: when, why and what it costs8 min, Beginner](/learn/path-13/module-13-4-futures-rollover) SSources ## Go to the source. 2 sources, NSE the most cited The publisher of each source listed below. Source: Module undefined source list. 1. [NSE, equity derivatives contract specifications (expiry cycle, lot size and strike rules)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 2. [SEBI investor education, Understanding derivatives](https://investor.sebi.gov.in/understanding_derivatives.html) SEBI ?Questions people ask ## Related questions. 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