Contango Report: Natural Gas, Silver, and Wheat Face Rising Prices

By Commodity HQ  JUN 19, 2013 3:01 PM

For these three commodities, near month futures are cheaper than those expiring further into the future, creating an upwards sloping futures prices curve.

 


In the futures world, the word contango is often treated like a four-letter obscenity. But when traders understand that it is simply a natural phenomenon that can be navigated, contango loses its negative connotation. Contango is defined as the process whereby near month futures are cheaper than those expiring further into the future, creating an upward sloping curve for future prices over time. It has been known to burn investors who are not aware of its presence, but staying one step ahead of the futures curve can lead to smarter, more efficient trades.

Below, we outline three commodities that are currently exhibiting contango to keep traders in-the-know about the world of hard assets:
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Editor's note: This article by Jared Cummans was originally published on Commodity HQ.
No positions in stocks mentioned.