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Webster 1913 Edition

Contango

Con-tan′go

(kŏn-tăṉ′gō̍)
,
Noun.
;
pl.
Contangoes
(#)
.
[Prob. a corruption of
contingent
.]
1.
(Stock Exchange)
The premium or interest paid by the buyer to the seller, to be allowed to defer paying for the stock purchased until the next fortnightly settlement day.
[Eng.]
2.
(Law)
The postponement of payment by the buyer of stock on the payment of a premium to the seller. See
Backwardation
.
N. Biddle.

Definition 2024

contango

contango

English

Noun

contango ‎(plural contangos)

  1. The situation in a futures market where prices for future delivery are higher than prices for immediate (or nearer) delivery.
    2005: most of these other commodities are generally in contango — Futures Industry Magazine
  2. The amount by which prices for future delivery are higher than prices for near delivery.
    2003: Normally new buyers would go after the March silver contract, especially with such a small contango. — Bill Murphy, Kitco Bullion Dealers
  3. (obsolete, London Stock Exchange) Fee paid by a buyer to the seller on settlement day when the buyer wishes to defer settlement until the next settlement day.

Antonyms

Related terms

References

  1. ↑ dictionary.com

Etymology

The term originated in mid-19th century England, and is believed to be a corruption of continuation, continue or contingent. [1] In the past on the London Stock Exchange, contango was a fee paid by a buyer to a seller when the buyer wished to defer settlement of the trade they had agreed. The charge was based on the interest forgone by the seller not being paid.

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