Contango and backwardation

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 2026-11-06

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…

Back to the full glossary — 282 defined terms.