contango

contango
A market condition in which futures prices are higher in the distant delivery months. Bloomberg Financial Dictionary
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A term used in the futures markets to describe the situation when the spot or nearby prices (cash prices) are lower than longer term prices (futures prices). The opposite of backwardation. Sometimes such markets are said to be at a premium. Dresdner Kleinwort Wasserstein financial glossary
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( i) On the London Stock Exchange, a mechanism for detailing settlement of a bargain until the next account day. This mechanism is used when the selling party is unable to deliver the stock for the appropriate account day. The selling party pays an interest premium to the buyer to cover the extended settlement period. On futures markets, a market in which distant months sell at a premium over near months.
(ii) In futures markets a situation in which prices are progressively higher in the succeeding delivery months than in the nearest delivery month. Exchange Handbook Glossary

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contango con‧tan‧go [kənˈtæŋgəʊ ǁ -goʊ] noun [uncountable]
FINANCE a situation in which the price for Commodities (= oil, metals, etc) being traded is lower for immediate delivery than it is for future delivery:

• The market was in contango - the price for metal for three-month delivery was $24 a tonne above that for immediate delivery.

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   A situation where futures prices are progressively higher the further the maturity date is from spot. The increase reflects the added cost of storage and insurance for commodities delivered further into the future. Contango is the normal relationship between spot and futures price and is the opposite of backwardation.
   ► See also Futures, Backwardation.

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contango UK US /kənˈtæŋɡəʊ/ noun [U]
► FINANCE, STOCK MARKET a situation in which the price of a commodity (= a product such as oil or a metal that is traded in large quantities) is higher if the buyer is to receive the commodity at a future date than it is if the buyer receives it immediately: »

The price slump would create conditions of contango, where massive current supply puts the spot price below the futures price.

 »

Much of the commodity market is at present in contango.

→ Compare BACKWARDATION(Cf. ↑backwardation)

Financial and business terms. 2012.

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Look at other dictionaries:

  • Contango — beschreibt eine Preissituation bei Warentermingeschäften, bei der der aktuelle Marktpreis für Rohstoffe niedriger ist als der Terminpreis (Liefertermin in der Zukunft). Lagerkosten – die Gesamtkosten der Lagerung eines Rohstoffs, von… …   Deutsch Wikipedia

  • Contango — Con*tan go (k[o^]n*t[a^][ng] g[ o]), n.; pl. {Contangoes}. [Prob. a corruption of contingent.] 1. (Stock Exchange) The premium or interest paid by the buyer to the seller, to be allowed to defer paying for the stock purchased until the next… …   The Collaborative International Dictionary of English

  • Contango — Contango, in London soviel wie Report (s.d.) …   Meyers Großes Konversations-Lexikon

  • contango — 1853, a stockbroker s invention, perhaps somehow derived from CONTINUE (Cf. continue), or from Sp. contengo I contain, refrain, restrain, check. As a verb, from 1900 …   Etymology dictionary

  • Contango — The graph depicts how the price of a single forward contract will behave through time in relation to the expected future price at any point time. A contract in contango will decrease in value until it equals the spot price of the underlying at… …   Wikipedia

  • Contango — A market condition in which futures prices are higher in the distant delivery months. The New York Times Financial Glossary * * * contango con‧tan‧go [kənˈtæŋgəʊ ǁ goʊ] noun [uncountable] FINANCE a situation in which the price for Commodities (=… …   Financial and business terms

  • contango — noun a) The situation in a futures market where prices for future delivery are higher than prices for immediate (or nearer) delivery. 2005: most of these other commodities are generally in contango mdash; Futures Industry Magazine [ …   Wiktionary

  • contango — Derecho. Término utilizado para definir la diferencia entre el precio de un contrato de futuros y el precio de contado. Lo normal es que el contango sea positivo, pues el precio de futuros excede al de contado. El contango disminuye según se… …   Diccionario de Economía Alkona

  • contango — Derecho. Término utilizado para definir la diferencia entre el precio de un contrato de futuros y el precio de contado. Lo normal es que el contango sea positivo, pues el precio de futuros excede al de contado. El contango disminuye según se… …   Diccionario de Economía

  • contango — /kontseggow/ A double bargain, consisting of a sale for cash of stock previously bought which the broker does not wish to carry, and a repurchase for the re settlement several weeks ahead of the same stock at the same price as at the sale plus… …   Black's law dictionary

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