Contango
TradingDefinition
Futures market state where longer-dated contracts trade above near-term ones. Implies expectations of higher future prices (or storage costs / cost-of-carry exceeding convenience yield).
The default state for most commodities and the VIX futures curve. Long-only futures-tracking ETFs lose money on rolls in persistent contango.
The default state for most commodities and the VIX futures curve. Long-only futures-tracking ETFs lose money on rolls in persistent contango.