Contango is a futures price above spot; backwardation is a futures price below it. Sharp backwardation in a delivery month is a classic symptom of a squeeze, though it also arises from genuine shortage.
history and doctrine · updated 2026-09-08
Where does contango and backwardation come up?
This term is used in the following manipulation techniques, each explained in full on
its own page.
Delivery squeeze— A delivery squeeze is controlling the certified stocks, warrants or logistics needed to satisfy a futures contract, so that short sellers cannot deliver even where the commodity exists elsewhere.
See also
Basis— The basis is the difference between an asset's cash price and the price of a derivative on it. Basis relationships are normally ar…
Delivery month— The delivery month is the period in which a futures contract requires physical delivery or final settlement. Manipulation risk con…