Contango Market: A normal futures market in which prices are higher in the succeeding delivery months than in the nearest delivery month. Opposite of backwardation.
Cover: To offset a short futures or options position with another transaction.
Interest yield
In the context of the LME, interest yield refers to the profit earned by borrowing metal in a contango market, sometimes giving the user a greater return than is available from the current interest rate on money.
The spread price would be subtracted from the average second month price in the event of a contango market. Thus, the second month weighted average of $88.588 plus the average differential of $0.0362 would give an implied first month price of $88.
 See also: Market, Contango, Exchange, Right, Rate
  
|
RSS
