Contango


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Related to Contango: Backwardation

Contango

A market condition in which futures prices are higher in the distant delivery months.

Contango

A situation in which the futures price for an asset is higher than the expected future spot price. The futures price in contango declines to the future spot price as the futures contract approaches maturity. See also: Backwardation, Keynesian economics.

contango

In futures or options trading, a market in which longer-term contracts carry a higher price than near-term contracts. The premium accorded to longer maturities is a normal condition of the market and reflects the cost of carrying the commodity for future delivery. Compare inverted market.

Contango.

The price of a futures contract tends to reflect the cost of storage, insurance, financing, and other expenses incurred by the producer as the commodity awaits delivery.

So, typically, the further in the future the maturity date, the higher the price of the contract. That relationship is described as contango.

If the opposite is true, and the price of a longer-term contract is lower than the price of one with a closer expiration date, the relationship is described as backwardation.

contango

  1. an additional payment made by an investor or speculator who has purchased or sold a SHARE, STOCK etc. on the UK STOCK MARKET in return for being permitted to carry over the settlement of the share transaction from one ACCOUNT PERIOD to the next.
  2. a condition in a FORWARD MARKET where the most distant delivery months trade at a premium to the near term delivery months.
References in periodicals archive ?
All grades should be cut because the Dubai contango is deeper than last month," said a trader.
The Pelican plant is scheduled to process up to 100 MMcf/d as Contango initiates production from its Mary Rose-1 and -3 wells.
As can be seen from Figure 4, the market shifted from backwardation on January 1, 2003, to contango by July 2006.
According to Contango Capital, the fund, Contango Capital Partners I L.
Joe Romano said, "I am excited to have the opportunity to lead Contango which has had such extraordinary success since its founding in 1999.
Banks, oil majors and trading companies with access to cheap credit are looking to reap the benefits of a market structure known as contango, where future prices are higher than the prompt, that tends to emerge in times of oversupply.
So I'm thrilled that George has agreed to take on another role at Contango and oversee the work of our Investment Committee, which is tasked with developing and managing investment strategies for clients," said David Magee, Contango's president.
According to Contango, Trulite is currently under contract with the Navy Research Laboratory to develop a HydroCell, the company's hydrogen storage device, for a fuel cell-powered unmanned aerial vehicle and has plans to develop commercial applications for the product, such as portable remote power applications and backup power supplies for computers and communications equipment.
Owen brings a combined expertise in operational and financial management to his new role at Contango, together with a significant breadth of experience across industries.
HOUSTON -- Contango Oil & Gas Company (NYSE MKT: MCF) announced today that it has reached total depth on its Ship Shoal 134 prospect (Eagle) and no commercial hydrocarbons were found.
Contango wealth managers also work closely with Zions' banks in their markets, offering wealth management services to bank customers.
Contango chief executive officer George Feiger explained: "Combining Contango's high-level analysis and access to sophisticated investment products with BG Associates' strong reputation and commitment to goal-oriented, family investing allows us to bring a level of wealth management to Arizona that I believe is unparalleled in the state.