One of the mysteries of the English language finally explained.
nounmass nounStock Market
1The normal situation in which the spot or cash price of a commodity is lower than the forward price.Often contrasted with backwardation
- ‘The opposite condition, one that obtains when the market quotes a higher price for a more distant and a lower price fore the nearby delivery date is known as contango.’
- ‘‘We could see 6 cents if people decide to sell off, but with the contango now back in the market there shouldn't be such a dire need to push stuff,’ a trader said.’
- ‘The $450 break was done in the February 05 contract (which puts the market in a contango - it used to be held in backwardation).’
- ‘On the other hand, oil has been in contango for most of the last year but the price has been in a gradual uptrend.’
- ‘One of the main incentives to crystallise a loss was that the same shares could be acquired within the 14-day contango period without giving rise to any broker commission.’
- 1.1historical A percentage paid by a buyer of stock to postpone transfer to a future settling day.
- ‘In the early 1980s, interest rates were still very high by current day standards and contangos were simply too large to forgo.’
- ‘We believe there will be some hedging from producers as high prices and contangos start to interest them in securing some profits.’
- ‘Bear in mind that hedging had its value in maximising income in a falling market, with high contangos, neither of which, if current sentiment persists, are likely to be present for a while.’
- ‘As shown in the chart above contangos have fallen from the range of 5-6% to today's 1%.’
- ‘In addition, underperformance by the stocks of heavily hedged producers, rising gold prices and materially lower contangos have reduced the incentive to hedge.’
Mid 19th century: probably an arbitrary formation on the pattern of Latin verb forms ending in -o in the first person singular, perhaps with the idea ‘I make contingent’ (see contingent).
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