Is it safe to say that today’s Oil Futures are trading at “Contango”
i guess so…
not on a trading desk, right now
Looks like it is to me. July 2008 134.50 Aug 2008 134.91 Sep 2008 135.08 Oct 2008 135.17 Nov 2008 135.36 Dec 2008 135.82
Yeah, but be careful of the guy who says contango has something to do with expectations. If you get that, say “I’m using contango in the sense of the opposite of inverted”. Now is this the beginning of the bear crude oil market? (I think no)
CFAI uses two different terms: Contango - futures prices are above spot prices Normal contango - futures prices are above expected spot prices I guess Joey is saying that you can use Contango but not Normal Contango.
maratikus Wrote: ------------------------------------------------------- > CFAI uses two different terms: > > Contango - futures prices are above spot prices > Normal contango - futures prices are above > expected spot prices > > I guess Joey is saying that you can use Contango > but not Normal Contango. Does CFAI say this? I sort-of like that. If someone asked me what terms I prefer they would be: “Normal” forward contracts have higher prices than nearby contracts “Inverted” opposite of normal “Contango” futures > Expected spot “backwardation” futures < expected spot “normal backwardation” futures < expected spot because hedgers are being rewarded for taking on risk “normal contango” futures > expected spot because hedgers are being rewarded for taking on risk but not really useful because it would mean that consumers of commodities are hedging more than producers which is not usually the case
yes, that’s the terminology that CFAI uses.