What is Contango?

A situation in the futures market where the forward price of a commodity is higher than the spot price.

In-Depth Explanation

This usually implies that investors are willing to pay a premium for a commodity in the future, often due to storage costs.

"The oil market is in contango, with the 6-month contract priced higher than the current spot price."

Knowing the terms is just the start. Learning how to apply them is where the edge is found.