Contango

○ The situation where the price of an asset for future delivery is higher than the expected spot price is known as contango.
○ Markets are said to be normal when futures prices are above the current spot price and far-dated futures are priced above near-dated futures.

Backwardation

○ The reverse, where the price of a an asset for future delivery is lower than the expected spot price is known as backwardation.

Markets are said to be inverted when futures prices are below the current spot price and far-dated futures are priced below near-dated futures.