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.
A situation occurring in the 'forward market' where prices for future delivery are higher than prices for early delivery. Similar to an interest rate on a bank deposit.
see also Backwardation) A term often used in commodities or futures markets to refer to markets where shorter-dated contracts trade at a lower price than longer-dated contracts. Plotting the prices of contracts against time, with time on the x-axis, shows the commodity price curve as sloping upwards as time increases.
The positive difference between the spot market gold price and the forward market gold price. It is normally expressed as a per-annum interest rate and is the difference between London Inter Bank Offer Rates (LIBOR) and the lease rate charged by institutions that lend gold.
a future price that is higher than the current price. The difference in the gold market results from the differential in the cost of borrowing gold (gold lease rate) and the interest earned on cash deposits.
The price of a futures contract being greater than the spot price of the underlying (usually a commodity).... more on: Contango
Market condition where the spot price is less than the three-month delivery price. This is considered the "normal" market state because the costs of storing and shipping metal are assumed to be higher in three months than at present.
A situation in which the price of a metal for forward or future delivery stands at a premium over the cash or spot price of the metal.
A condition in a futures market where the future price would begin above the expected spot price and fall as contract maturity approaches. (opposite of backwardation).
A market condition in which prices are progressively higher in future months than in the nearest delivery month. A contango market usually reflects ample supplies of a commodity. Opposite of "Backwardization."
A fee paid by a buyer of stock for the right to delay taking delivery. Used in commodities.
The commission paid by a buyer for the postponement of a transaction on a stock exchange when prices for future delivery are higher than those for cash or spot transactions. The opposite is backwardation.
A market situation in which prices are higher in the succeeding delivery months than in the nearest delivery month. Also known as a carry market, it is the opposite of backwardation.
The situation when the price of a metal for forward or future delivery is greater than the cash or spot price of the metal. Contangos occur when the metal is in plentiful supply. The size of the contango does not normally exceed the cost of financing, insuring and storing the metal over the future delivery period. (See also Cash and Carry).
A market situation where the spot price is lower than the forward quotation; the differential representing the carrying (financing) costs and prevailing interest rates. Opposite of backwardation.
Is the normal or carrying charge structure for a commodity market. It lists progressively higher prices for the more distant delivery months. This progression in prices reflects implicitly cumulatively higher storage and financing costs.
A market condition in which futures prices are higher in the distant delivery months.
When the price for immediate delivery of a commodity is lower than the price of delivery for a future date.
A condition when the front month prices are lower than the back month prices. This is normal for most markets because back months include carrying costs (interest, storage, etc.).
Cash price lower than forward price
A futures market where further dated delivery months trade at a premium to the near month.
A relationship in which spot or cash prices are lower than futures (or forward) prices. (Opposite of Backwardation).
The condition where longer term futures contracts carry a higher price than shorter term contracts. This condition encourages inventory builds if the contango exceeds the costs of carrying the commodity for future delivery. In other words, prices are low now but people believe prices will go up so they carry as much inventory as possible. Backwardation is the situation with opposite circumstances from contango.
LME term applied when the price quoted for copper due for delivery in three months’ time is higher than that for cash copper on that day. This is the normal market situation, financing the interest charge.
The difference between a forward price and a nearby price when the former exceeds the latter. This is typical in gold. Also, if there is no supply constraints, the contango will reflect interest rates and storage charges.
When prices for future delivery in a commodities market are higher than those for cash or spot transactions. The gap between a cash price and a forward quotation is often based on current interest rates plus storage and insurance costs to cover the cost of holding the commodity for the relevant period. The opposite is backwardation.
Contract month pricing situation in which future prices get progressively higher as contract dates get progressively longer, creating negative spreads as contracts go further out. The increases reflect carrying costs, including storage, financing, and insurance.
Market situation in which prices are progressively higher in the succeeding delivery months than in the nearest delivery month. Also termed carrying charge; opposite of backwardation.
Market situation in which prices in succeeding delivery months are progressively higher than in the nearest delivery month; the opposite of "backwardation."
Market scenario when the forward price of a commodity is higher than the spot price.
A condition where forward prices exceed spot prices.
The charge made for the accommodation when a speculator who has bought stock desires to postpone delivery
(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
Whereby futures prices are higher than spot or cash prices.
The reverse of backwardation. A relationship between prices in which prompt, immediately available oil sells at discount to future supplies. Oil markets were in contango during most of the first half of 1990.
Contango is a futures market term. It is the situation where, and the amount by which, the price of a commodity for future delivery is higher than the Spot price. Or a far future delivery price higher than a nearer future delivery.