Contango

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Contango is a futures market term that describes a normal market condition of expected rising prices in succeeding months. In a market that is in contango, prices are progressively higher for each listed futures month of a contract.^[1] Contango is the opposite of backwardation.^[2][3]

In theory contango market conditions represent an increase in price from today's spot price plus the potential arbitrageur's cost of storage and the time-value of money.^[4]

Also See

Futures glossary

References

1. ↑ Contango - What's in a name?. Contango Oil & Gas Company. Retrieved on February 2, 2008.
2. ↑ Glossary of Terms. U.S. Commodity Futures Trading Commission. Retrieved on February 2, 2008.
3. ↑ Contango Lessons. Middle East Economic Survey. Retrieved on February 2, 2008.
4. ↑ Peak Oil Contango?. The Oil Drum. Retrieved on February 2, 2008.