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Contango

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



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? Mentioned in ? References in periodicals archive
 
HOUSTON -- Contango Oil & Gas Company (AMEX:MCF) announced today that its affiliated company, Republic Exploration LLC ("REX"), was the high bidder on two lease tracts at the State of Louisiana Mineral Lease Sale held on February 14, 2007 in Louisiana.
Contango Affiliate the High Bidder on Two Lease Tracts at State of ... by Business Wire
HOUSTON -- Contango Oil & Gas Company (AMEX:MCF) announced today that it has completed the arrangement of a $30 million secured term loan facility with a private investment firm.
Contango Announces $30 Million Debt Financing and Updates Operations by Business Wire
HOUSTON -- Contango Oil & Gas Company (AMEX:MCF) announced today that it has given notice to the holders of its Series D preferred stock that the Company has elected to convert all of the outstanding shares of Series D preferred stock to shares of common stock.
Contango Elects to Convert Its Series D Preferred Stock by Business Wire
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