Convenience Yield

Convenience Yield - a Convenience Yield is the total the premium benefit of actually holding a physical commodity A Convenience Yield is the actual owning of a particular good, rather then owning a futures contract for that good. Convenience Yields sometimes show up as an adjustment to a futures price of a commodity, or as a future contract delivery price. Sometimes Convenience Yields are earned, by holders of government bonds that are in short supply in the market. When there is a shortage of a particular good, it is better to own it now, and then purchase it later because the cost of the good will be much higher to the fact that the demand for the good will be much higher, therefore the price will be higher as well.