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How Does Contango Affect the Cost of a Long-Only Rolling Hedge?

In a contango market, a long-only rolling hedge is generally more expensive to maintain. When the expiring long contract is rolled into a new, higher-priced contract, the hedger must pay the difference (the roll yield).

This repeated cost erodes the profitability or increases the overall cost of the hedge over time.

What Happens If the Price of the Commodity Moves in the Hedger’s Favor?
Is Rolling over Always Profitable for the Trader?
What Is the Risk of “Contango” When Rolling a Position?
What Is the “Roll Yield” and How Does It Relate to Contango and Backwardation?