Here, let us focus on this potential etymology, rather than the other one on Etymonline.
I quote Sundaram, Rangarajan, and Sanjiv Das. Derivatives: Principles and Practice. 2nd ed. New York, NY: McGraw-Hill Education, 2016, page 46.
I quote Hull, J. C. (2022). Options, futures, and other derivatives (11th ed.), page 125.
Op. cit., p 809.
How does contango's definition below semantically appertain to the English verb 'continue'? What notions underlie 'continue', with contango's financial meaning below?1853, "charge made or percentage received by a broker or seller for deferring settlement of a stock sale," a stockbroker's invention,
perhaps somehow derived from continue
I quote Sundaram, Rangarajan, and Sanjiv Das. Derivatives: Principles and Practice. 2nd ed. New York, NY: McGraw-Hill Education, 2016, page 46.
A futures market is said to be in backwardation futures prices are below spot. It is said to be in contango if futures prices are above spot. As we will see in Chapters 3 and 4, in a typical commodity market with a positive cost-of-carry, the theoretical futures price is above spot, i.e., the market should be in contango. However, in some commodity markets (notably oil) futures prices are often below spot. This phenomenon is commonly attributed to the presence of a large "convenience yield" from holding the spot commodity, an issue we discuss further in Chapter 4.
I quote Hull, J. C. (2022). Options, futures, and other derivatives (11th ed.), page 125.
When the futures price is below the expected future spot price, the situation is known as normal backwardation; and when the futures price is above the expected future spot price, the situation is known as contango. However, it should be noted that sometimes these terms are used to refer to whether the futures price is below or above the current spot price, rather than the expected future spot price.
Op. cit., p 809.
Source for pic below.Contango A situation where the futures price is above the expected future spot price (also often used to refer to the situation where the futures price is above the current spot price).
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