Business, Legal & Accounting Glossary

Definition: Contango


Full Definition of Contango

Contango refers to a situation that can arise in the futures market.

When the price of a futures contract is lower than its spot price, or when a price that is farther in the future than a nearer future price is higher, then it is said to be ‘in contango’.

If there was a curve showing the value of a contract sloping upwards over time, then it would be contango curved. In theory, this would suggest that prices are expected to rise over the life of the contract(s).

Backwardation refers to the opposite situation when a future price is lower than the spot price.

Common Usage

Traders will say that the forward curve is ‘in contango’.

The term ‘contangoed’ is sometimes used, but it is generally considered to be incorrect.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Contango. Payroll & Accounting Heaven Ltd.
March 01, 2024
Chicago Manual of Style (CMS):
Contango. Payroll & Accounting Heaven Ltd. (accessed: March 01, 2024).
American Psychological Association (APA):
Contango. Retrieved March 01, 2024
, from website:

Definition Sources

Definitions for Contango are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 28th March, 2020 | 0 Views.