contango

Meaning

Noun

1. (countable, uncountable) The situation in a futures market where prices for future delivery are higher than prices for immediate (or nearer) delivery, indicating the expectation that the price of the underlying asset will go up.
2. (countable, uncountable) The amount by which prices for future delivery are higher than prices for near delivery.
3. (countable, obsolete, uncountable) Fee paid by a buyer to the seller on settlement day when the buyer wishes to defer settlement until the next settlement day.

Verb

To charge (a buyer) a fee to defer settlement until the next settlement day.

Synonyms

carry-over

extend

extension

postpone

postponement

prolongation

renewal

forward premium

continuation day

forwardation

Translations

report

Börsenreport

Terminaufgeld

التأجيل

report à terme

prima a término

prima a plazo

Etymology

The term originated in early-19th-century England, and is believed to be a corruption of continuation, continue or contingent. In the past on the London Stock Exchange, contango was a fee paid by a buyer to a seller when the buyer wished to defer settlement of the trade they had agreed. The charge was based on the interest forgone by the seller not being paid.