Contango Law and Legal Definition

An upward sloping forward curve in the futures market is said to be "in contango". In Contango is the situation where the, the price of a commodity for future delivery is higher than the spot price, or a far future delivery price higher than a nearer future delivery. This is often due to the costs of storing and insuring the underlying commodity. Contango is a normal situation for equity markets. The opposite market condition to contango is known as backwardation.