What Is the Concept of ‘Contango’ and ‘Backwardation’ in Futures Markets?

Contango is a market condition where the futures price of an asset is higher than the expected spot price at contract maturity, often seen when there are high carrying costs. Backwardation is the opposite, where the futures price is lower than the current spot price.

This is common in commodity markets and can occur in crypto when supply is constrained or strong demand for immediate delivery exists.