Contango

From 1

An occasional characteristic of the futures markets in which prices in succeeding delivery months are progressively higher than in the nearest delivery month. The price difference will not exceed the "carrying" cost to warehouse the commodity which would include storage, the cost of capital, and insurance because if it did there would be a profit opportunity for investors to store the commodity and sell it in the future. Contango is the opposite of backwardation.

Discussion:

This area is for debates on this topic.

Footnotes:

See Also (links to blogs, forums, external sources, etc...):

Tags:
none
 
Images (0)
 
Comments (0)
You must login to post a comment.