What Is "Contango" and What Does It Imply about the Basis? ▴ Learn

What Is “Contango” and What Does It Imply about the Basis?

Contango is a market condition where the futures price of a commodity or financial asset is higher than the expected spot price at a future date, or where the longer-dated futures contracts are priced progressively higher than the nearer-dated ones. In the context of the basis (Spot – Futures), contango implies a negative basis, as the Futures Price is higher than the Spot Price.

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