Contango

ahd-5
  • noun. A state in which the price of a futures contract is higher than the eventual or expected spot price of the underlying commodity or security.
  • The Century Dictionary and Cyclopedia
  • noun. On the London stock exchange, the charge made by a broker for carrying over a bargain to the next fortnightly settling-day; the consideration paid by the buyer of stock for the privilege of deferring settlement until the next settling-day.
  • the GNU version of the Collaborative International Dictionary of English
  • noun. The premium or interest paid by the buyer to the seller, to be allowed to defer paying for the stock purchased until the next fortnightly settlement day.
  • noun. The postponement of payment by the buyer of stock on the payment of a premium to the seller. See Backwardation.
  • Wiktionary, Creative Commons Attribution/Share-Alike License
  • noun. The situation in a futures market where prices for future delivery are higher than prices for immediate (or nearer) delivery.
  • noun. The amount by which prices for future delivery are higher than prices for near delivery.
  • noun. Fee paid by a buyer to the seller on settlement day when the buyer wishes to defer settlement until the next settlement day.
  • Word Usage
    "That increase from contract to contract is called contango, and it can cut into fund returns."
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