Word: contango
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Dates: during 1931-1931
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...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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