BACK TO contango
contango vs. backwardation
contango vs. backwardation: What's the difference?
Contango and backwardation are terms used in the context of a forward cure in a market. When a market is in contango, the futures price of a good is higher than the spot price—so, it’s less expensive to buy the good to be delivered now than to buy it to be delivered later. When a market is in backwardation, the reverse applies—the futures price is lower than the spot price.
[ kuhn-tang-goh ]
- (on the London stock exchange) a fee paid by a buyer of securities to the seller for the privilege of deferring payment.
[ bak-wer-dey-shuhn ]
- (on the London stock exchange) the fee paid by a seller of securities to the buyer for the privilege of deferring delivery of purchased securities.