contango

/kənˈtæŋɡoʊ̯/

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.

contango means 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. Lexicurio rates it Sui generis — a strength score of 93 out of 100.

contango is pronounced /kənˈtæŋɡoʊ̯/.

noun

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.“most of these other commodities are generally in contango”
The amount by which prices for future delivery are higher than prices for near delivery.“Normally new buyers would go after the March silver contract, especially with such a small contango.”
Fee paid by a buyer to the seller on settlement day when the buyer wishes to defer settlement until the next settlement day.“Yesterday was Settling Day in Consols, and Monday next the Settling of Omnium. Owing to the great scarcity of money, the Contango on both is extremely great, nearly equal to 15 per cent. for money, from account to account.”

verb

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