Economics Options And Futures Questions
Contango is a concept in futures trading that refers to a situation where the futures price of a commodity is higher than the expected spot price at the time of delivery. This typically occurs when there is a higher demand for the commodity in the future, leading to an upward sloping futures curve. Contango can result in higher costs for investors who hold long positions in futures contracts, as they may have to pay a premium for the commodity when it is eventually delivered.