What Is the Term for a Futures Price Trading at a Significant Premium to the Spot Price? ▴ Learn

What Is the Term for a Futures Price Trading at a Significant Premium to the Spot Price?

This situation is known as "contango." It is the normal market condition where the futures price is higher than the current spot price. This premium typically reflects the "cost of carry," which includes storage costs, insurance, and the financing cost (interest) of holding the underlying asset until the futures expiration date.

What Is the Relationship between Basis and the ‘Cost of Carry’?

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

Define ‘Contango’ and ‘Backwardation’ in the Context of Crypto Futures Pricing

What Is a ‘Contango’ Vs. a ‘Backwardation’ Market Structure in Futures Trading?