Word: contango
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...also cannot transport it very easily. Gas is typically stored in underground reservoirs. The pressure of the gas and the type of reservoir can make injection and extraction cycles difficult and lengthy processes. Until traders see extra storage realized, the natural gas market will be priced in steep contango, meaning prices of natural gas for future delivery will hang far above the current price. The low prices now represent the abundance of unusable and potentially unstorable gas, a situation that will not last. (Read "Can Steven Chu Win the Fight Over Global Warming...
...market has been in what futures traders call a massive contango - that is, future prices of oil are at extreme highs relative to the current price. Therein lies opportunity: buying and holding oil now, then selling it in the future, can generate an almost risk-free profit. Citigroup has already leased a supertanker to store oil that it will sell later this year. (Read "A Brief History of the Oil Barrel...
...Paris, Amsterdam and Brussels) brought them business from residents of the U. S., who lived in a foolish country where it was necessary to put up 55% margin on the purchase of stocks bought on speculative account. London only wanted 20% or 25% and, in many cases, ran contango accounts with no margin at all.* So London took all these commissions from New York and, by a process that is a little obvious today, shouldered what should have been New York's losses. It may have been that London only got New York's 'bad' accounts...
...London, in contrast to New York's daily clearance and settlement by 2:15 of the following day. Purchasers may buy a stock on the account's opening day, advance no money until settlement time. However, during this period they must pay an interest rate or "contango." Contango is in general based on prevailing rates, but stocks with a large bull account command a higher contango, very speculative shares cannot be contangoed at all. There is no contango when a large bear interest exists but bears must pay a premium known in London as "backwardation...
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