Could someone please explain to me how positive carry is achieved when the repo rate is negative?
For example I can see the German repo rate is -0.57% and the 2 year German bund is -0.78%. So to generate a positive carry, am I paying or receiving the -0.57%?
I think I am paying the -0.57% (which means I am receiving this?) and then with the cash I go off and buy the 2 year bund at -0.78%. Is that correct? If so, is my positive carry -0.79 + (-0.57) = -0.21%
But that is still a negative yield so what am I doing wrong???