contango
/kənˈtaŋɡəʊ
/noun [mass noun] Stock 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....
- The $450 break was done in the February 05 contract (which puts the market in a contango - it used to be held in backwardation).
- 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.
1.1 historical A percentage paid by a buyer of stock to postpone transfer to a future settling day.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.
- We believe there will be some hedging from producers as high prices and contangos start to interest them in securing some profits.
Origin
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).