from Wiktionary, Creative Commons Attribution/Share-Alike License
- n. The situation in a futures market where prices for future delivery are higher than prices for immediate (or nearer) delivery.
- n. The amount by which prices for future delivery are higher than prices for near delivery.
- n. Fee paid by a buyer to the seller on settlement day when the buyer wishes to defer settlement until the next settlement day.
from the GNU version of the Collaborative International Dictionary of English
- n. The premium or interest paid by the buyer to the seller, to be allowed to defer paying for the stock purchased until the next fortnightly settlement day.
- n. The postponement of payment by the buyer of stock on the payment of a premium to the seller. See Backwardation.
from The Century Dictionary and Cyclopedia
- n. On the London stock exchange, the charge made by a broker for carrying over a bargain to the next fortnightly settling-day; the consideration paid by the buyer of stock for the privilege of deferring settlement until the next settling-day.
The term originated in mid-19th century England, and is believed to be a corruption of continuation, continue or contingent. In the past on the London Stock Exchange, contango was a fee paid by a buyer to a seller when the buyer wished to defer settlement of the trade they had agreed. The charge was based on the interest forgone by the seller not being paid. (Wiktionary)