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YouTube T3-18: Commodity (eg, gold) lease rate

Nicole Seaman

Chief Admin Officer
Staff member
The least rate is the borrowing rate a commodity owner charges if (s)he lends the commodity. The least rate is equal to the convenience yield minus the storage cost: L = y - u. Because if the commodity owner LENDS the commodity, (s)he forgoes storage cost but also the convenience yield. In this way, we can think of the lease rate as a "net convenience yield."

David's XLS is here: https://trtl.bz/2NozX3D

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