contango

Definitions

Banking

  • noun a cash price which is lower than the forward price

Economics

  • noun payment of interest to a stockbroker for permission to carry payment for shares from one account day to the next; also called ‘carry-over’

Forex

  • A market condition where a futures price is above the expected futures spot price. The futures price in such a condition is expected to fall to the spot price before delivery. This is considered normal for many non-perishable commodities because of costs factors such as transportation and warehousing as well as interest on money that is tied up in the contract. Forex "spread" traders may take short or long investment positions based on the expected increase or decrease in the spread when a given currency derivatives market is contango.
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