How To Make Money In Contango

And who is the biggest winner in these trades, when your portfolio is bleeding? They are always the banks and financial institutions which you trust the most. ” If the price in the future is lower than it is currently, it is in “backwardation. Dollar fell dramatically against other global currencies in 2010 and the trend is likely to continue in 2011. -2- bank funds, using threats, physical force or other unauthorized means to collect money; making a payment for an expressed purpose on the Company’s behalf to an individual who intends to use it. Earlier this week, the six-month contango in Brent market, a gauge of the economic viability of floating storage, widened to a record of $14. The term “cost of carry” refers to the cost of owning or “carrying” an asset. This is because make money online now the constant decay due to the way it is calculated and the fact that most of the time, markets are in Contango. In other words, it’s more profitable for you to store your oil today and sell it later on down the road. n We make the following assumptions: n No delivery options. Things that take cost into consideration but not something like this. The risks of VIX futures. Contango Effect for Oil ETFs (Caution !!!) On the surface, Oil ETFs seems like an easy and harmless way to buy oil. BIC / Swift Code CNANAU3B XXX is the unique bank identifier for CONTANGO ASSET MANAGEMENT LIMITED's head office branch located in MELBOURNE - AUSTRALIA and it's used to verify financial transactions such as a bank wire transfers (international wire transfers). I think that backwardation & contango are inflation-expectation neutral, because that is already accounted for in the time-value-of-money input to arbitrage. Last week, Contango acquired the assets and operations of Oklahoma City's White Star Petroleum in a $132. Let’s not worry ourselves with how much Vitol will make—they’re big boys and can take care of themselves. they force the holder to make good — i. Agreement and Plan of Merger, dated as of April 29, 2013, by and among Contango Oil & Gas Company, Contango Acquisition, Inc. The contango on December 2015/December 2016 NYMEX crude oil spread stood at over 10 percent on September 8, 2015, still well above interest rates for the period. Contango Effect for Oil ETFs (Caution !!!) On the surface, Oil ETFs seems like an easy and harmless way to buy oil. dear white people. BIC / Swift Code CNANAU3B XXX is the unique bank identifier for CONTANGO ASSET MANAGEMENT LIMITED's head office branch located in MELBOURNE - AUSTRALIA and it's used to verify financial transactions such as a bank wire transfers (international wire transfers). In order to profit from backwardation, traders would need to buy a futures contract on gold that trades below the expected spot price and make a profit as the futures price converges with the spot price over time. 02, the largest since February 2016. Contango usually occurs when an asset price is expected to rise over time. MONEY HOUR 59 views. The curve becomes backwardated. The Brent market flipped into contango last week for the first time since July 2019 as prompt prices fell below forward prices. Three years ago the Brent contango widened to the point where oil companies and trading houses could make money by buying crude oil, storing it at sea and then selling later. Contango sounds like it might be some sort of exotic dance that you do against (con) someone, and maybe the definition of backwardation is what your partner does, just the opposite (indeed, it is, but we're getting a little ahead of. Form 424B5 CONTANGO OIL & GAS CO making an offer to sell or soliciting an offer to buy these securities under any circumstance in any jurisdiction where the offer or solicitation is not. Due to the extreme supply glut and lack of demand for oil. gold futures contract. That is, it is an ETF designed with intent to track the DAILY price moves in the ^VIX volatility index. The Segwit2x fork was abruptly cancelled on November 8, and Bitmex’s December 2017 contracts immediately reverted to contango. The cuisine, freshly prepared to order, ranges from Western with a pizza oven and Churassco Grill to Chinese, Japanese, Malay and Thai. Contango Oil & Gas Co. You could buy the spread (sell the front and buy further out) to bet the bottleneck will be fixed. A contango is a situation where the price of front month oil futures is lower than oil with future delivery. Hence, investors can watch the backwardation in the gold market, as it may signal the imbalance between supply and demand for the yellow metal. In a contango market, the Futures Price = Spot Price + Finance (interest rate on the money borrowed to own the physical commodity) + Storage (cost of hiring tanks, tankers or warehouses. When natural gas or oil is in contango, a producer might want to lock in the price of oil and gas to get a better short-term price to ensure its profits. The EIA estimates that contango trade will be unviable until contango conditions reach $10–$12 per barrel. Everyone take out your worksheets and your Number 2 pencils. The question then is when the contango unwinds. That was definitely the case for Contango Oil & Gas (). Like this MoneyWeek Video? Want to find out more on contango and backwardation? Go to: http://www. It is simply too early to tell if we have seen the “Last Contango,” but as Dr. Webmasters can build their traffic by taking the keywords their target market runs searches on and incorporating them inside their sites. Contango is the manager of Switzer Dividend Growth Fund, which has raised $100 million. If you invest $100 today and make 5% in the first year and reinvest ($105) and make 8% in the second year, the compound annual growth rate is 6. 25 per month to store it for 12 months ($3) and. 30 cents/gal. Contango in VXX does not make you money if you short VXX, it is just a property of the distribution. Some people lost a ton of money when the price of crude oil crashed, but smart futures traders made a bundle. Let's not worry ourselves with how much Vitol will make—they're big boys and can take care of themselves. The current contango in live cattle points to a combination of ample supplies and lower demand. MONEY HOUR 59 views. For holders of USO to make money, front-month oil prices—which rallied nearly 50% from their January lows—will have to keep powering higher to offset this notable drag from contango. The energy market is seeing regular 25% swings and even negative oil prices. The cost of money is important because at times companies can consume huge sums of money to finance the play. So yes, American's have little experience, since the Civil Wa. The current contango in live cattle points to a combination of ample supplies and lower demand. You could buy 30 June 300 puts with -20 delta and sell 20 313 puts with a -30 delta. In that light, the extreme contango of the current market reflects many factors, chief among them the extraordinary weakness of current demand that has caused prompt prices to collapse, combined with the seemingly-inevitable collision between limited global supplies and the long-term demand from the large developing economies of Asia. 85 a barrel, the biggest discount. For example, if the price of a crude oil contract today is $100 per barrel, but the price for delivery in six months is $110 per barrel, that market would be in contango. This phenomenon is called Contango. For example, let's say January oil futures are trading at $40, February oil futures are $45 and March oil. Contango eats a fund's seed corn, chewing away its value. Thus, in a contango, the front month futures contracts are usually higher than the distant months. If you want gold bars that are easy to be bought and sold, you can go for intermediate or small sizes. Deficit spending, war and a Fed that is flooding the market with dollars to assist the banking market could cause accelerating rates of inflation and continued currency weakness. Press J to jump to the feed. However, this could change quickly if the shape of the curve transitions into steep contango or backwardation. You would expect to see kind of minor ones. Price target in 14 days: 0. 1254169 and Contango Funds Management Limited (CFML) ACN 085 487 421, collectively referred to as the 'Contango Group'. n Interest rates are constant. To explain this in greater detail, if you consider yourself a physical steel player and can currently buy HRC close to $700/ton, you could make money in this contango market. There's Something to the Contango ETNs making it similar to UNG, Get an email alert each time I write an article for Real Money. Contango is when the futures price is above the expected future spot price. The reason I am considering taking my oil profits to the sideline for a while is solely based on the risk of a storage crisis which could spark a panic sell off that in a single month can create a truly massive contango, wiping out 20%, 30%, 50% of the value of an oil ETF or certificate. Carl Esprey, Executive Director at Contango Holdings is interviewed by @Donaldleggatt @LondonSouthEast. As long as the price spread between the two contracts is greater than the cost of storage, the trader can make a profit. The foreign exchange market is the world's most liquid market, with more than 5-trillion a day exchanging hands. I heard that Warren Buffett was the best at making money via stocks so I started by reading a lot about him, all of his shareholders letters and several of the books that he recommended. What matters is what the tanker owner makes. On average, XIV gains about 0. MONEY HOUR 59 views. Those making an arbitrage play can simply add up the spot price of the futures contract for oil plus storage costs. the blessed virus teaches us so, dammit! bill barr tears the seamless garment. Important Notification: Oil Trading During Contango Crude oil prices have seen record moves last week as the capitulation in concerns for the demand outlook resulted in a downside shock with prices breaking below $0 for the first time on record, posting lows of -$37. 74 a barrel in after-hours electronic trading on the New. 5 million deal. Yet, the company's lessened dependence on oil price contango could make it a more solid dividend stock relative to pure-play tanker names. Exhibit 4 shows a contango term structure (black curve) and a backwardated term structure (golden curve). Strategic Petroleum Reserves) look like when production continues to rise in conjunction with strikes at the refineries, raising inventory levels to an 80 year high. CL25) stopped going down throughout January and the latest oil price weakness, or move higher in the contango, was primarily related to the front-month contract still adjusted to supply issues. 45 a barrel while the six-month spread for U. It's really just the first step," said Olivier Jakob of consultancy Petromatrix. popular ETFs that tracks the price of oil is the. we are all a collective. We make sure it's issued in proper proportion to make the goods pass easily from the producers to the consumers. The opposite of contango – backwardation, when future VIX prices are lower than at present – generally appears when the VIX trades above 20. For example, let's say January oil futures are trading at $40, February oil futures are $45 and March oil. View Vinodh C’S profile on LinkedIn, the world's largest professional community. Contango have just been readmitted to the London Stock Exchange Main Market. By Oksana Patron Contango Asset Management (CGA) has acquired the remaining 53. In 2016, for example, Shell was using $1 billion in finance for its contango trades. By contrast, the June WTI contract is trading at a (slightly) more reasonable $26. The fund would lose money in a contango market when it sells the futures as they near their expiry on April 21 and buys the next month. , Tips and strategies to help you manage your money delivered straight to your inbox. Canadian Dollars are also used for payments in the French overseas collectivity of Saint Pierre and Miquelon. Imagine earning $5 per barrel, four times in a year? You make $20 in contango. In this case, the price curve of the successive maturities of the futures contracts is ascending, although as the maturity dates approach, the price will tend to converge with the spot price. LONDON, Nov 1 (Reuters) - Contango Holdings Plc lists on London's junior stock market on Wednesday, after raising a million pounds ($1. The best way to bring the vxx down is decreasing number of contracts (due to contango) and simultaneous decreasing vix futures. How to Invest in Oil Right Now. West Texas Intermediate was down 5. ) Let’s say I currently have a portfolio of 1 January and 1 February /VX. A new price structure, called a contango, allows the traders to make easy money by buying crude cheap, storing it, and selling it forward. music selection: "Girl On Fire" — Alicia Keys weigh-in: 211. The numbers in the chart indicate an arbitrage opportunity in Bitcoin futures markets, where traders could make a return of 5. The four stocks mentioned here which Contango has been buying recently are all up significantly which could mean the easiest gains are already. Futures Roll. As you can see, the front end of the curve is in very sharp contango - prices for oil a couple of years out are almost $10/barrel higher than prices for oil delivered next month. Perhaps the greatest source of criticism against USO comes from the fact that the ETF is frequently in contango. I heard that Warren Buffett was the best at making money via stocks so I started by reading a lot about him, all of his shareholders letters and several of the books that he recommended. And yet the strategy managed to make money. Contango Oil & Gas: New Ways To Make Money 7:27AM ET 5/13/2020 Seeking Alpha. The cuisine, freshly prepared to order, ranges from Western with a pizza oven and Churassco Grill to Chinese, Japanese, Malay and Thai. Storing Oil = Easy Money With the contango, traders can make huge profits simply by storing millions of barrels of oil for sale down the road. It still offers opportunities to make money as a company with access to storage can buy oil and simultaneously enter into contracts to sell it in the future at higher prices. Let’s not worry ourselves with how much Vitol will make—they’re big boys and can take care of themselves. Contango results in an upward sloping futures curve, as the premium for future delivery increases with the expiration date of the contract. Say $95 Sep2015. Brent crude was in contango for as much as $0. Generally ships only make money when they’re moving, and using a ship as a floating storage tank is hard on the ship (marine life grows on the underside). 10 widened to around $1. The market is in contango; the futures price is greater than the expected future spot price. Contango Asset Management Stock Price Forecast, CGA stock price prediction. This is because make money online now the constant decay due to the way it is calculated and the fact that most of the time, markets are in Contango. In this case, the price curve of the successive maturities of the futures contracts is ascending, although as the maturity dates approach, the price will tend to converge with the spot price. A contango is normal for a non-perishable commodity which has a cost of carry. In 2016, for example, Shell was using $1 billion in finance for its contango trades. In finance, a forward contract or simply a forward is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on at the time of conclusion of the contract, making it a type of derivative instrument. In theory, the future price of a durable and easily storable commodity—say like gold, silver, and bitcoin—should always lie above the current price, or in contango. What is Contango? A market is said to be in contango when the futures price is at a premium to the expected future spot price. Contango would drill, develop, and produce successful finds. The oil and gas company posted revenue of $34. In the context of the global shutdown, Kupperman reveals how the combination of the current oil futures contango, all-time highs in tanker charter rates, and the dearth of crude oil storage could lead to never-before-seen revenues and profits for the tanking companies. As you can imagine, trading houses want to lock in the tanker and go right into the teeth of the contango. A contango market is one where futures contracts trade at a premium to the spot price. This website has been prepared by Contango Asset Management Limited (CGA) ACN 080 277 998 on behalf of its fully owned subsidiaries; Switzer Asset Management Limited (SAML) ACN 123 611 978, AFSL 312247, Contango International Management Limited (CIM) ACN 617 319 123, CAR No. How to Invest in Gold Exchange Traded Funds (ETFs) Until the first physical gold-backed ETF, the StreetTRACKS Goldshares ETF (GLD) (later renamed SPDR Gold Shares) came to market in 2004, investing in physical gold was more onerous. 32 million) from investors, with a plan to buy resources assets. If the front month is lower (a backwardation situation) they would sell early at a higher price than the front month, therefore make a profit. This enables Contango to make money even in times of depressed natural gas prices. , future delivery costing more than immediate delivery, and the charge representing cost of carry to the holder. If oil trades sideways around $45 (most likely), you will still make money as these ETFs loose between 1% and 3% per month. 08 – $6 or $2. In order to make my point clear, let’s consider the time when oil prices were around $40 back at the end of 2008. In other words, it’s more profitable for you to store your oil today and sell it later on down the road. It is exemplified by a upward slowing forward curve. The opposite of contango – backwardation, when future VIX prices are lower than at present – generally appears when the VIX trades above 20. Money that you can use to FINALLY buy the car you want, to pay off your mortgage, or even to retire early! You can get started today and make money from anywhere, so long as you have connection to the internet, and right away you’ll see profits far beyond anything you’ve experienced with horse racing, footie betting or any of the other real. Contango sounds like it might be some sort of exotic dance that you do against (con) someone, and maybe the definition of backwardation is what your partner does, just the opposite (indeed, it is, but we're getting a little ahead of. The costs or yield of rolling forward a position in natural resources can make turning a profit easy or uphill work, depending on your mix of contango and backwardation. As smaller investors pile into the risky and troubled United States Oil Fund, hedge funds are taking the other side of that trade and making a lot of money. The opposite of contango is backwardation, which is much rarer in the gold market. Both care about whether commodity futures markets are contango markets or normal backwardation markets. I dropped the service from the IGM settings to take a few months off and fearing I've now lost this. What does it mean when the options price of a…. Once it has spiked, move down to a 15 minute chart. Woodford Investment Management Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 745433). Wait for the VIX to make a two standard deviation move on the upside, on a daily chart. Negative prices meant traders taking delivery of crude oil in May would have to pay to get rid of it. Last week, Contango acquired the assets and operations of Oklahoma City's White Star Petroleum in a $132. The Brent market flipped into contango last week for the first time since July 2019 as prompt prices fell below forward prices. Contango Holdings was a shell company set up 2 and a half years ago to look for a near term production asset "which could be developed and turned into cashflow in short order". , funds that are tracking the GSCI) have positions concentrated in the nearby contracts. As a small-cap company, MCF's shareholders. For years, the largest “Volatility” product in the marketplace was the “Long” structured VXX (iPath S&P 500 VIX Short-Term Futures ETN, Expense Ratio 0. HOUSTON, March 12, 2020 -- Contango Oil & Gas Company (NYSE American: MCF) (“Contango” or the “Company”), as a result of the decline in commodity prices. Traders with access to physical oil and storage can make substantial profits in a contango market. You can see how the price for March futures is higher than the January contract month, indicating that there is an increasing demand for soybeans and also. To be an average money manager, and by definition most money managers are average, you must zig and zag like the herd. In depth view into Contango Oil & Gas Co Owner Earnings per Share (TTM) explanation, calculation, historical data and more. The most rational futures price is the expected future spot price. Shop for Vinyl, CDs and more from Mr. Imagine earning $5 per barrel, four times in a year? You make $20 in contango. The contango in many commodity markets in September 2015 pointed to a combination of ample supplies and lower demand. The best way to bring the vxx down is decreasing number of contracts (due to contango) and. Contango and backwardation are used most often in the context of futures markets for commodities. 46 a barrel, surpassing the peak set in the 2008-09. A contango market structure means the current value is lower than it will be in later months and encourages traders to store oil to resell it in the future. Smelling blood, those who did have storage outside of Oklahoma waited until the BOC coughed up enough to make it worth rerouting the oil to the West Coast. Provide details and share your research! But avoid … Asking for help, clarification, or responding to other answers. MIDLOTHIAN, Texas (AP) — Ennis Inc. Generally ships only make money when they’re moving, and using a ship as a floating storage tank is hard on the ship (marine life grows on the underside). 75 per cent interest in Switzer Asset Management (SAM), increasing its ownership to 100 per cent, and offered a chief executive role (CEO. " People of a certain age will remember those instructions from grammar school. A contango is a situation where the price of front month oil futures is lower than oil with future delivery. oil benchmark, dived down into negative territory. Generally, it depends on a current level of interest rates and present dividend yield for S&P500. To have that large money-maker contango, we're not there yet. See this chart as I compare spot to GC1 and GC2 to spot. Conventional wisdom is that buying the front-month will more closely track spot prices, but there are ETFs that explicitly alter this approach in an attempt to avoid contango or profit from backwardation, with varying levels of complexity—and success. This article can demystify … Read More →. They need $45 oil or more to make money in the longer-term. It is not really related to the Fed policy, it is just a result of the VIX contango, and as a result, VXX price drifting lower. Contango occurs when commodity prices are higher on futures markets than they are on related spot markets, and backwardation is the opposite. " As a verb, from 1900. tt/2TERxoN Markets About Real business info There are so many different possibilities to start an online business with real business info, We will guide you to choose the best business for you and earn as much money as possible. Fortunately for investors, commodity markets are not always in contango. Hedgewise can intelligently manage your oil investments for you at a low fee and with zero commissions. Selling options does not make you money, it is just the most likely scenario. music selection: “One Way Or. As we have noted, if the VIX is in contango (an upward sloping futures curve), then VXX will lose modest money every day rolling from the shorter-term future to the longer (and higher priced) one. BIC / Swift Code CNANAU3B XXX is the unique bank identifier for CONTANGO ASSET MANAGEMENT LIMITED's head office branch located in MELBOURNE - AUSTRALIA and it's used to verify financial transactions such as a bank wire transfers (international wire transfers). Contango eats a fund’s seed corn, chewing away its value. It's making money, which is a very positive sign. A new price structure, called a contango, allows the traders to make easy money by buying crude cheap, storing it, and selling it forward. Beware the lure of fast money in the oil carry trade, warns John Dizard or the “smart money” of private equity funds,. Further, a contract in contango (trading above spot price) will decrease in value until it equals the spot price of the underlying at maturity. Backwardation is the opposite of contango. Will the present contango in crude oil markets have a bullish impact on the shares of Nordic American Tankers (NAT)? Can present buyers or merchants profit from a per share value improve as a result of oil producers and futures merchants will search to retailer oil on tankers?. Excel opens - but it doesn't open the file. A contango market simply means that the futures contracts are trading at a premium to the spot price. 47, eleven bucks cheaper, creating a huge future premium (known as a ‘contango’) that businesses are paying. My bet is that the prices will be higher in 12 months, so what would be the best option to make a trade on this position? Buying an ETF on Bloomberg WTI Crude Oil Subindex?. Tangled up in contango If you invest in commodities using futures, you have to deal with rolling over contracts as they expire. A simple explanation is that to deliver aluminum to you in 5 years, I need to buy the aluminum now at whatever the current price is and store it for 5 years. In the currency world, contango is the norm, but so is backwardation. This means prices are surely going up in the future, so companies will do everything in their power to wait to sell oil in order to get the most profit possible. The contango on December 2015/December 2016 NYMEX crude oil spread stood at over 10 percent on September 8, 2015, still well above interest rates for the period. com uses the M1 / M2 slope as the contango rate, which is reasonable, but you could also make a case that the M1 to VIX gap is a better measure. Oil costs money to store, ship, insure, etc. The Canadian dollar was identified as one of the safe haven currencies for 2017. "Quite simply the contango is no longer there, so it does not make any economic sense to enter into a new floating storage trade, unless the deal was locked in when the contango was sufficient to cover freight. The GSCI tracks front month contracts. The opposite of contango is backwardation, which is much rarer in the gold market. The buyer, known as the long, agrees to take delivery of the underlying commodity. Gold is not available at any price quoted in Zimbabwe dollars. Contango generally exists when the VIX is flat or trending lower. If contango is high and the market is slowly grinding down, the VXX will lose money daily. Price target in 14 days: 4. doing the contango In a contango market, the Futures Price = Spot Price + Finance (interest rate on the money borrowed to own the physical commodity) + Storage (cost of hiring tanks, tankers or warehouses) + Insurance (premiums for insuring the commodity against loss, sinking, damage, theft etc). Contango usually occurs when an asset price is expected to rise over time. Also the VIX futures are frequently in contango as people overestimate the likely-hood of extreme outcomes, hence VXX is a bad long term buy and hold candidate. Steps to invest in commodities. In the last part of our series, we have revealed the most important thing to understand commodity spreads - the reason for the existence of contango. How to Start Investing in Share Market||Can we earn Income From Trading?|| Money-Hour||Shashank_Goel - Duration: 22:17. The best way to bring the vxx down is decreasing number of contracts (due to contango) and simultaneous decreasing vix futures. Contango sounds like it might be some sort of exotic dance that you do against (con) someone, and maybe the definition of backwardation is what your partner does, just the opposite (indeed, it is, but we’re getting a little ahead of. Here is a histogramm of contango values, you can see that VIX is in contango most of the time, but backwardation tail (left side of distribution) is really heavy. Incorporated in England and Wales, company number 10118169. A contango is when the current cash price of oil is lower than the projected price for a date in the future. Contango Asset Management Limited (ASX:CGA) is a financial services company with a marketing and distribution platform that partners with, and promotes, high quality fund managers to the self-directed and Independent Financial Adviser (IFA) channels of the $2 trillion superannuation industry. The firm engages in the exploration, development, production and acquisition of crude oil and natural gas properties. Let's not worry ourselves with how much Vitol will make—they're big boys and can take care of themselves. Make Money with Volatility Trading. Backwardation is the opposite of contango. 117% yield on a 6-month T-Bill. Money that you can use to FINALLY buy the car you want, to pay off your mortgage, or even to retire early! You can get started today and make money from anywhere, so long as you have connection to the internet, and right away you'll see profits far beyond anything you've experienced with horse racing, footie betting or any of the other real. Located in the Tower Wing, Contango is a luxuriously designed contemporary restaurant featuring an open kitchen interactive dining concept with a seating capacity for 250 people. Crude Oil Contango by Bob Ward. 74 a barrel in after-hours electronic trading on the New. It's making money, which is a very positive sign. Even if orders are executed simultaneously, a profit or loss could still occur when futures contracts expire and are being rolled forward due to backwardation or contango. If the spread between these prices is large enough to cover storage, finance and shipping costs, a trader is able to make a profit by buying oil now and selling it on the futures market for a later delivery. Imagine earning $5 per barrel, four times in a year? You make $20 in contango. The cuisine, freshly prepared to order, ranges from Western with a pizza oven and Churassco Grill to Chinese, Japanese, Malay and Thai. – Convenient withdrawals Withdraw your money in an instant using a wide range of available payment systems. They are often in backwardation. When oil demand cratered earlier this year because of the coronavirus and a flood of […]. Second, Contango entered an asset agreement to acquire White Star Petroleum LLC's assets. In order to profit from backwardation, traders would need to buy a futures contract on gold that trades below the expected spot price and make a profit as the futures price converges with the spot price over time. Fortunately for investors, commodity markets are not always in contango. For example, let's say January oil futures are trading at $40, February oil futures are $45 and March oil. Example of a super-contango. This Indicator Could Spell Trouble. The market is liquid 24-hours a day, 5-days a week, opening in the evening on. On average, XIV gains about 0. USO And Contango. Contango is a sign of a balanced or glut market Contango exists in a market when deferred prices are higher. ' We issue it to pay the government's approved expenses and charities. MONEY HOUR 59 views. Contango is bad for certain ETFs because if you’re constantly paying a higher price every month to replace your expiring contract with the next month’s futures contract, you will lose money over time in relation to the movement in the spot price of the commodity. Storing Oil = Easy Money With the contango, traders can make huge profits simply by storing millions of barrels of oil for sale down the road. The Saudis are tying us the boats, the game is on Supertanker Prices Spike By Nearly 678% On Oil Market War And Storage Plays in International Shipping News 14/03/2020 Despite a sobering week for the global crude oil market as the coronavirus or Covid-19 outbreak strangles the global economy, shi. 80 ball bingo is based on 75 ball bingo. In 2016, for example, Shell was using $1 billion in finance for its contango trades. Making delivery at the New York futures market, the COMEX, wasn’t that simple anymore. Real-Money, LIVE Trading: EWZ Iron Butterfly (Closing Trade) : After nearly pinning the stock at our short strikes, and thanks to the volatility drop, we netted a $600 profit on this iron butterfly trade. In 2018 it happened at least 3-4 times. papal tweeter: you rotten people make ‘individualism’ you’re guiding principle. A simple explanation is that to deliver aluminum to you in 5 years, I need to buy the aluminum now at whatever the current price is and store it for 5 years. Here is a histogramm of contango values, you can see that VIX is in contango most of the time, but backwardation tail (left side of distribution) is really heavy. The money-making penny stock has risen 178% since then. That is a slight premium over the 5. 024604 which may imply that Contango Oil Gas will maintain its good market sentiment and make money for investors. Backwardation is most likely to occur when there is a short-term shortage of a particular commodity—specifically with soft commodities like oil and gas, but less likely to occur in money. In a contango market, the Futures Price = Spot Price + Finance (interest rate on the money borrowed to own the physical commodity) + Storage (cost of hiring tanks, tankers or warehouses) +. Makes no effort whatsoever to avoid getting faked out by monthly futures rollover. the farther in the future the delivery date) the more expensive the contract. This combines the thoughtfulness of giving a gift card or gift certificate with the convenience and flexibility of gifting money. While other IT companies may recommend products that will make the most money and have the most recurring monthly fees, Contango IT focuses on giving customer's the solutions they really need. $5 x 2 million barrels for VLCC = $10 million. Portfolio diversification is an investment strategy used to spread risk across a number of asset classes. Contango usually occurs when an asset price is expected to rise over time. Conoco and ENI beat consensus by 15%… If these two beat witht heir exposure to domestic gas, imagine the rest. 024604 which may imply that Contango Oil Gas will maintain its good market sentiment and make money for investors. The company replaced its credit agreement with a new 5-year agreement while management went on a shopping spree. As a small-cap company, MCF's shareholders. The best long-term & short-term Contango Oil & Gas share. Recently. Contango definition is - premium or interest paid on a fixed day on the London stock exchange by a buyer to the seller to be allowed to defer payment until a future settlement. ) Let’s say I currently have a portfolio of 1 January and 1 February /VX. THE BASICS OF ETFS AND MUTUAL FUNDS. Wait for the slope of the moving average on the 15 minute chart to move downward, this prevents you from getting short a spike too early. But a lot of investors do not understand that there is this contango effect. The outlook at the end of 2019. When they buy the more expensive contracts — more expensive thanks to contango — they lose money for their investors. When VIX futures are in contango, they’re always selling for a loss which means that the ETF/ETN needs to re-balance at lower prices. It's making money, which is a very positive sign. Odd error: if I click on an Excel 2007 file to open it from within explorer, it says "There was a problem sending a command to the program". Read and compare your options with Beninga's analysis for 2020. The prices are down but the Contango in the Futures is still there. For example, an airline company, which requires vast amounts of oil in order to operate, may be afraid that oil prices will go up in the future. Contango means that the price for commodities for future delivery contracts is much higher than the spot gold market price. When natural gas or oil is in contango, a producer might want to lock in the price of oil and gas to get a better short-term price to ensure its profits. They are often in backwardation. It's still possible to make money in a contango environment, but the way you have to look at it is the spot price of oil has to rise at least 14. instead of making 5% "carry", the speculator will net 4. The budget attributable to White Rose and Will Energy is very minimal. This is what we like to call contango in the commodities market. A contango market is one where futures contracts trade at a premium to the spot price. If $9 million goes to the tanker owner, the trader gets to keep $1 million risk free. The listing follows a management buyout of the company in June, involving chief investment officer, George Boubouras, and an investment vehicle led by. In Saudi-Russia price war, the big winners are oil traders A new price structure, called a contango, allows the traders to make easy money by buying crude cheap, storing it, and selling it forward. Vinodh has 6 jobs listed on their profile. The fact that these companies will have access to ultra-cheap domestic feedstock will lead to their higher profitability. oil futures prices were negative. Contango vs Backwardation. If you want to make a bullish bet on crude oil by June, you would go out and buy June crude oil futures, which are $42. Canadian Dollars Exchange yours now. In the currency world, contango is the norm, but so is backwardation. the FCM/GCM community were able to make money on collateral deposited by their clients through the offsetting of positions in the customer segregated account - the ‘gross-net’ play. Why speculators are stashing vast quantities of crude oil on tanker ships. He installed new leadership and funded the company with his own money to turn the company around. Say you went to grab one of these contracts today for $25 and sell in a few months for when oil is $40, you can still lose money on the trade due to these insane rolling premiums. The process is called roll yield, and in the case of contango, the return is negative due to falling prices. Of course not. On Wednesday, Contango Income Generator Limited (CIE:ASX) closed at 0. he’ll tell you to your twitface too, just before he blocks you!. In depth view into Contango Oil & Gas Co Owner Earnings per Share (TTM) explanation, calculation, historical data and more. The contango on December 2015/December 2016 NYMEX crude oil spread stood at over 10 percent on September 8, 2015, still well above interest rates for the period. Investors bet on the future of oil prices through a financial instrument, oil futures in which they agree on a contract basis, to buy or sell oil at a set date in the future. Yet, the US has aided in fighting both world wars on European soil, when they could have refused to do so, while at the same time providing the vast majority of men and equipment to battle the Japanese due to the 'Europe First' policy. When VIX futures are in contango, they’re always selling for a loss which means that the ETF/ETN needs to re-balance at lower prices. Threat of Substitute Products or Services. The fund would lose money in a contango market when it sells the futures as they near their expiry on April 21 and buys the next month. This does not apply to gold as it is a currency that has an own interest rate. After a lot of thought on finding a lean way to explain the forward vs spot markets I've concluded the best method is to provide a bullet point outline of concepts with a few details included. Beware the lure of fast money in the oil carry trade, warns John Dizard or the "smart money" of private equity funds,. View Vinodh C’S profile on LinkedIn, the world's largest professional community. Arguably revenue is our next best option. 61% is trading above $32 a barrel — seems to indicate optimism for an eventual. “tagle is a high stakes gambling addict, and is known to have multiple seven-figure outstanding markers (casino loans) in the casinos of macau. Should the markets be static, we would not be able to make a profit as spread traders. Investing mistakes I’ve made – contango and exchange traded commodities (ETC’s) Since I took full responsibility for my retirement investing strategy I’ve made some mistakes that have cost me money. They refer to whether the price of a commodity futures contract - known as the futures price - is trading above or below the price quoted for the physical commodity - known as the spot price. The “last contango in Washington” refers to the end of the hegemony of the irredeemable dollar that is in no position to throw its weight around any more. Sitting on the sideline on contract roll week with a. Last week, Contango acquired the assets and operations of Oklahoma City’s White Star Petroleum in a $132. the farther in the future the delivery date) the more expensive the contract. Backwardation occurs when the price of a commodities futures contract is below its projected spot value at a specified forthcoming point in time. Contracts. In the currency world, contango is the norm, but so is backwardation. The Canadian Dollar was introduced as the currency of Canada in 1858, replacing the Canadian Pound. When supply and demand are not in sync this is when a price move is going to happen, if there are more willing buyers than there are sellers in the market then a price will go up and vice versa. Think about it: If companies have to pay to store the oil in tankers offshore, then the cost per barrel will go up. Crude Oil Contango by Bob Ward. The same pattern holds true for the April 20-21 price curve. Let’s not worry ourselves with how much Vitol will make—they’re big boys and can take care of themselves. So if you wanted to make more interest than is offered on T-Bills, you could buy spot gold now and sell a Dec. This is based off the May WTI Crude futures contract, which settled on 21st April in the U. The opposite of contango is backwardation, which is much rarer in the gold market. Learn more. Assumed cost of five months of storage = 3. There is a condition called contango (no, it's not a tropical disease) where the future prices for a commodity are higher than the current spot prices for the commodity. Agreement and Plan of Merger, dated as of April 29, 2013, by and among Contango Oil & Gas Company, Contango Acquisition, Inc. Webmasters can build their traffic by taking the keywords their target market runs searches on and incorporating them inside their sites. Full access to the RBN Energy blog archive which includes any posting more than 5 days old is available only to RBN Backstage Pass™ subscribers. You would only do this in a time of extreme contango. You can view the curriculum if you scroll down. Specifically, is the price of our contract rising or falling? Suppose we entered into a December 2012 futures contract. First note that most indexed money (e. This phenomenon is called Contango. If contango is high and the market is slowly grinding down, the VXX will lose money daily. In the context of the global shutdown, Kupperman reveals how the combination of the current oil futures contango, all-time highs in tanker charter rates, and the dearth of crude oil storage could lead to never-before-seen revenues and profits for the tanking companies. Strategic Petroleum Reserves) look like when production continues to rise in conjunction with strikes at the refineries, raising inventory levels to an 80 year high. “With large sums of money owing to us, we are bound to protect ourselves, and we shall do so in future, I hope, by greater care in the extension of credits to customers. What does it mean when the options price of a…. 55% over the 10 months difference in expirations, you get 5. Potential investors will look at your past returns and work history to form an opinion on whether in the future you can make them money. $5 x 2 million barrels for VLCC = $10 million. It still offers opportunities to make money as a company with access to storage can buy oil and simultaneously enter into contracts to sell it in the future at higher prices. White highlighted that this is a “very large acquisition” by Contango. I won't go to details about how they make the money, but you should always seek professional advice before going into any such investments. The oil cash-and-carry trade does the shipping tanker contango. “Almost all the spot (tanker) deals right now have floating storage tied into them – that’s the only way to make money. So if you wanted to make more interest than is offered on T-Bills, you could buy spot gold now and sell a Dec. Backwardation occurs when the price of a commodities futures contract is below its projected spot value at a specified forthcoming point in time. Contango will take over the operations of Mid-Con's oil and gas assets in exchange for a $4 million annual services fee, a $2 million annual deferred fee component and warrants to purchase MCEP. Fortunately, it is possible to reverse the contango headwind into a tailwind (turn the cost of contango into income). (Except that you can no longer get money to really leverage it enough. 25 per month to store it for 12 months ($3) and. Why speculators are stashing vast quantities of crude oil on tanker ships. In recent weeks Brent crude oil, the global oil benchmark, has shifted into backwardation - a state when spot prices are higher than prices for futures contracts, creating a downward-sloping curve for futures prices (see chart). 08/Bbl and storage is likely to cost somewhere around 50 cents/Bbl per month – or a total of $6/Bbl netting a trade profit of $8. Threat of Substitute Products or Services. Learn more. Contango is the manager of Switzer Dividend Growth Fund, which has raised $100 million. Insights At A Glance: How MLPs Make Money By Segment. However, the more than 100% decline in the May contract doesn’t tell the entire story, as the […]. Backwardation is most likely to occur when there is a short-term shortage of a particular commodity—specifically with soft commodities like oil and gas, but less likely to occur in money. Contango is a phenomenon in the futures market that simply means that the current spot price is lower than the futures price. Contango is the phenomenon that occurs when the price of futures contracts is higher than that of the underlying asset (the spot price or spot price). We’ve been here before, after the financial crash. Again, being average is the goal. We are planning a little gathering/cocktail party for all Disciplined Investors. 02, the largest since February 2016. Contango can be devastating for futures ETFs in the long term, as a roll decay can hurt the price each month. This is the classic way merchants of non-perishable goods make money – buy when the market is low, wait for demand to increase and then sell at a higher price. If contango is high and the market is slowly grinding down, the VXX will lose money daily. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This quick checklist will help keep you out of harms way by making sure you make smarter entries. A forward curve is said to be in contango (contango in gold) when futures (for instance gold futures) are traded at a premium over spot (for instance spot gold price). During calm years volatility might spike once a year. Below is a complete guide to starting. Crude rally stalled near $50 a barrel in the past month and the one-year price contango — where near-term deliveries are cheaper than those a year ahead — has almost doubled. Futures Roll. In the currency world, contango is the norm, but so is backwardation. 47, eleven bucks cheaper, creating a huge future premium (known as a ‘contango’) that businesses are paying. 75 per cent interest in Switzer Asset Management (SAM), increasing its ownership to 100 per cent, and offered a chief executive role (CEO. Other traders may seek to profit on a storage shortage by placing a spread trade betting on the. The combination of losses due to the 2X structure and contango add up to typical TVIX losses of 15% per month (85% per year). Option contracts tend to assume the same thing. Why Contango can eat up all your returns (in plain English). The Segwit2x fork was abruptly cancelled on November 8, and Bitmex’s December 2017 contracts immediately reverted to contango. As soon as the structure flattens, the incentive to store will disappear, spurring traders to sell oil back into the. We believe that Contango Oil & Gas Company may be worth examining further. He installed new leadership and funded the company with his own money to turn the company around. Free bingo games are played according to the same rules but without depositing your money you can win the cash. How to Make Money Trading: Everything you need to know to control your financial future - Kindle edition by Van Dam, Lex. What matters is that there is contango. Rebalancing your portfolio is one of the critical factors necessary in securing successful investments over a long-term period. While vast cuts by producer countries and renewed fuel consumption from easing coronavirus lockdowns may soon rebalance oil supply and demand, some analysts and traders see a glut in storage keeping the market in contango for much longer. Fortunately, it is possible to reverse the contango headwind into a tailwind (turn the cost of contango into income). The four stocks mentioned here which Contango has been buying recently are all up significantly which could mean the easiest gains are already. "contango rate" in Chinese: 交易延期费; 升水率, 贴水率; 贴水率 "contango transaction" in Chinese: 延续交易 "contango or making up day" in Chinese: 升水或贴水日 "contango or making-up day" in Chinese: 升水或贴水日 "contango price of money" in Chinese: 延期日息. Will the present contango in crude oil markets have a bullish impact on the shares of Nordic American Tankers (NAT)? Can present buyers or merchants profit from a per share value improve as a result of oil producers and futures merchants will search to retailer oil on tankers?. Even when you lose money, you don’t have to lose the lesson. The contango on December 2015/December 2016 NYMEX crude oil spread stood at over 10 percent on September 8, 2015, still well above interest rates for the period. – Convenient withdrawals Withdraw your money in an instant using a wide range of available payment systems. everyone who disagrees with patrick coffin’s a despicable childish coward. Why Contango can eat up all your returns (in plain English). Contango Oil & Gas Stock Price Forecast, MCF stock price prediction. Contracts. Hear Expert Insights. instead of making 5% "carry", the speculator will net 4. The EIA estimates that contango trade will be unviable until contango conditions reach $10–$12 per barrel. When they buy the more expensive contracts — more expensive thanks to contango — they lose money for their investors. There's Something to the Contango ETNs making it similar to UNG, Get an email alert each time I write an article for Real Money. Threat of Substitute Products or Services. On the London Stock Exchange in the 1800s, contango was a fee paid by buyers to sellers for the delay of a payment. You can make almost 1% on the spread! Lever that up a few times and it becomes interesting. The money doctors run scared. What matters is that there is contango. Despite the contango phenomenon (although it will reduce his profit margin), an investor still stands to make money on guessing that the commodity price will go up in a year. The current contango in live cattle points to a combination of ample supplies and lower demand. Contango Oil & Gas: New Ways To Make Money. This will give you some knowledge about the meaning of these two terms. This quick checklist will help keep you out of harms way by making sure you make smarter entries. And this is the whole essence of this strategy - win 75-80% of the time when VIX is in contango, but keep the losses manageable when volatility spikes. Crude Oil Contango by Bob Ward. Citigroup suggests that if oil prices fall below $30 per barrel, it will be unviable to. “Full contangos are back in,” said Olivier Jakob, founder of energy consultant Petromatrix GmbH and a former oil trader. A simple way to remember contango and backwardation is this: contango is when the market is dancing upward, but backwardation is when the market falls back. Yes, Even Bitcoin HODLers Can Lose Money in the Long-Term: Here’s How Market analyst Philip Swift explains how blockchain data helps traders spot Bitcoin highs and lows for making wiser investments. Backwardation and Contango Markets. 3 million in its first quarter. Contango Asset Management Stock Price Forecast, CGA stock price prediction. In 2018, Goff purchased a large stake in Contango as an investment opportunity. Contango and backwardation is a real-time indicator of supply and demand fundamentals. Those who makes the necessary combination the first is a winner. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. making less. Buying the spread, though, has had a significant roll cost, making it much harder to make money if it takes a while. A new price structure, called a contango, allows the traders to make easy money by buying crude cheap, storing it, and selling it forward. You would expect to see kind of minor ones. 2 Contango describes a commodity price curve where spot prices and near-dated futures trade below longer-dated futures. The Porter’s Five Forces model can be used to analyse the industry in which Contango Oil Gas Company operates, in terms of attractiveness through inherent profit potential. Is it on sale? Even better, Contango Oil & Gas Company looks like a stock on sale. Its goal is to follow the percentage change in the price of the commodity‘s front month contract, said John Hyland, portfolio manager and chief investment officer of the fund. Contango Share Discussion Threads. Such costs include warehousing fees and interest forgone on money tied up, less income from leasing out the commodity if possible ( e. In a contango market, the Futures Price = Spot Price + Finance (interest rate on the money borrowed to own the physical commodity) + Storage (cost of hiring tanks, tankers or warehouses) + Insurance (premiums for insuring the commodity against loss, sinking, damage, theft etc). But what started as a mild dip has powered past $1 per barrel looking further ahead. In order to make my point clear, let's consider the time when oil prices were around $40 back at the end of 2008. The Brent market flipped into contango last week for the first time since July 2019 as prompt prices fell below forward prices. On the London Stock Exchange in the 1800s, contango was a fee paid by buyers to sellers for the delay of a payment. In 2018 it happened at least 3-4 times. Contango is a head wind. In something like this, you can usually arbitrage it out and make some money assuming you can store oil or you have oil to sell or buy and all the rest of that. Three years ago the Brent contango widened to the point where oil companies and trading houses could make money by buying crude oil, storing it at sea and then selling later. Learn the translation for ‘contango’ in LEO’s English ⇔ German dictionary. The opposite of contango is backwardation, which is much rarer in the gold market. Therefore, as a result, there’s a shortage of gold in the physical marketplace, creating what is known as contango. This lesson is part 6 of 6 in the course Investing in Commodities A portfolio manager can use several approaches to make commodity investments. The fund would lose money in a contango market when it sells the futures as they near their expiry on April 21 and buys the next month. Many MLPs also own storage, which may become more desirable given the steep contango in crude markets incentivizing storage. In this case the 12 month contango spread is $8. So yes, American's have little experience, since the Civil Wa. Contango is when the shorter implieds are below the longer implieds. In 2016, for example, Shell was using $1 billion in finance for its contango trades. How to Make Money in Forex Trading: A Complete Guide for Beginners There are several steps you should take before you start transacting in the forex market. I won't go to details about how they make the money, but you should always seek professional advice before going into any such investments. ca Hello, Sign in. by Ship & Bunker News Team. In a contango market, the Futures Price = Spot Price + Finance (interest rate on the money borrowed to own the physical commodity) + Storage (cost of hiring tanks, tankers or warehouses) +. Contango's fiscal year ended in June 2012, and according to the company's 10-K filing with the SEC, revenue sank 11% from the previous fiscal year. When we put all that information together, we see how an individual can make money by placing propane into storage: Price of August 2019 Belvieu contract (8/1/19) = 44. The purchases are often at higher prices if the curve is in contango, thus losing the spread amount between the two contracts that are rebalancing. Another strategy is to buy put options during times of low volatility. 4 million through a share placing, which will go towards bringing block B2 at the Lubu coalfield in Zimbabwe back into production. We believe that Contango Oil & Gas Company may be worth examining further. Tom Fischer Why gold's contango suggests central bank interference assuming, of course, that we denote the gold interest rate in that paper currency, as is done with the Gold Lease Rates of the London Bullion Market, which refer to the underlying Dollar amount of gold. Incorporated in England and Wales, company number 10118169. This is what we like to call contango in the commodities market. The opposite of that is known as Backwardation. In such a case, the investor will choose to sell the current contract or wait for it to expire to maintain commodity exposure in the future. A contango is normal for a non-perishable commodity that has a cost of carry. How to Make Money Trading: Everything you need to know to control your financial future - Kindle edition by Van Dam, Lex. View Vinodh C’S profile on LinkedIn, the world's largest professional community. Carl Esprey, Executive Director at Contango Holdings is interviewed by @Donaldleggatt @LondonSouthEast. But on the margins, the move toward backwardation has been bullish, because it points to a healthier market where demand is returning. Should your trade make a profit covering your goal, close it and take the profit. The costs or yield of rolling forward a position in natural resources can make turning a profit easy or uphill work, depending on your mix of contango and backwardation. Contango pricing strategies that catch small investors by surprise are intuitively obvious to the managers of a large firm, who must decide whether to take delivery of a product today, at today's spot price, and store it themselves, or pay more for a forward contract, and let someone else do the storage for them. Say you invest today and the spot price of crude is US$30, for simplicity's sake. When Contango Roll is bigger than 10%, the SVXY tends to do really well because contango is high and increasing. Option contracts tend to assume the same thing. Contango Asset Management Limited is a boutique wholesale and LIC fund manager, with mandates across the entire market capitalisation spectrum, and is set to list on the ASX in late September. Super-contango creates an incentive for traders to buy gas now, store it and lock in future profits. And this is the whole essence of this strategy - win 75-80% of the time when VIX is in contango, but keep the losses manageable when volatility spikes. You will probably have seen in the news yesterday morning (21st April 2020), that U. n S(0) is the underlying price. Other markets like the Vix Futures make a large portion of profits on the downside due to amount of Contango (caused by the Volatility Risk Premium in Vix). Ok, I calculated for each day a price for a two-contract basket, just like one they use in VXX. They either don’t have the metal to make delivery (shorts), or don’t have the money to take delivery (longs). You would want to make this trade at a time of backwardation. They average their contract holdings into all 12 month contracts to mitigate the contango effect. This type of severe Contango is very, very unusual. Contango Confusion. Get a thorough appraisal from Contango Investments before you invest in a business. Contango is a head wind. How to Start Investing in Share Market||Can we earn Income From Trading?|| Money-Hour||Shashank_Goel - Duration: 22:17. The curve becomes backwardated. The graph of the Cash VIX term structure as of 2 Jan 2020 shows a perfect contango (remember, at that date, very few of us had heard of COVID19 and even fewer could imagine the consequences. A lot of the area produces natural gas. How can I best estimate the level of contango or backwardation?. Located in the Tower Wing, Contango is a luxuriously designed contemporary restaurant featuring an open kitchen interactive dining concept with a seating capacity for 250 people. 024604 which may imply that Contango Oil Gas will maintain its good market sentiment and make money for investors. Incorporated in England and Wales, company number 10118169. The Contango team will not only expand our capacity and bring with it a strong client base but it will enable AEG to provide a much broader and diversified service to the industry. Musings on UVXY. Such costs include warehousing fees and interest forgone on money tied up, less income from leasing out the commodity if possible (e. Condition prevailing in the market where futures prices in the later/ distant delivery months are higher. During calm years volatility might spike once a year. 3 percent premium on an annualized basis to spot on the Kraken exchange, according to data from Skew metrics. Contango Effect for Oil ETFs (Caution !!!) On the surface, Oil ETFs seems like an easy and harmless way to buy oil. A contango market is one where futures contracts trade at a premium to the spot price. The oil cash-and-carry trade does the shipping tanker contango. * contango oil & gas (mcf) - amendment provides for slight increase in applicable margin of borrowing base utilization-based pricing grid. The "contango" trap The VIX futures market is said to be in a state of contango - that is, when the current price is lower than the future price. Storing Oil = Easy Money With the contango, traders can make huge profits simply by storing millions of barrels of oil for sale down the road. Futures contracts are firm commitments to make or accept delivery of a specified quantity and quality of a commodity during a specific month in the future at a price agreed upon at the time the commitment is made. Let’s assume oil is in contango. Even when you lose money, you don’t have to lose the lesson. But on the margins, the move toward backwardation has been bullish, because it points to a healthier market where demand is returning. Earlier in the week, further-dated contracts were trading at a discount to the spot price, a situation known as “backwardation. It recovered to $0. Stack Exchange Network Stack Exchange network consists of 177 Q&A communities including Stack Overflow , the largest, most trusted online community for developers to learn, share their knowledge, and. The best long-term & short-term Contango Asset.