Questions tagged [contango]

DEFINITION of 'Contango' A situation where the futures price of a commodity is above the expected future spot price. Contango refers to a situation where the future spot price is below the current price, and people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity.

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Effects of Backwardation and Contango on Supply

As an example, if on June 1st, we observe that the term structure of oil prices is in backwardation up to the end of that year. After the New Year, the term structure of oil prices is in contango. ...
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How does contango actually affect the price of an ETF?

How does contango actually affect the price an ETF trades at? For example, take the Unites States Oil Fund (USO) that is supposed to track the price for West Texas Intermediate (WTI) crude. It is ...
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Is contango a contradiction?

If a market is in contango the futures curve slopes upward as forward prices are higher than today. It is also true that prices must fall as they converge toward the spot price at the time of maturity ...
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What is a “spread” in commodities futures?

I was reading an article and it states Tightness has returned to the London Metal Exchange (LME) aluminium spreads. The focus point this time around is the December-January spread (CMALZ4-F5),...