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Contango (Part II): CNBC Explains

Sunday, 29 May 2011 | 12:00 AM ET

Contango may seem daunting to those new to the market or unfamiliar with futures contracts, but it doesn't have to be. Simply put, contango occurs in a market when futures prices for a commodity are greater than the current spot price. Severe Contango can send distinct signals to the market. Salman Khan illustrates.