Contango
A futures-curve state where forward prices > spot — typical for crypto perps when funding is positive.
Persistent contango is the structural condition under which the Basis trade earns yield: long spot + short futures captures the futures-spot premium as time passes. The opposite state (Backwardation) flips the carry trade upside-down.
Related terms
- BackwardationA futures-curve state where forward prices < spot — typical during stress when shorts pay longs to hold positions.
- Basis tradeLong spot + short perpetual (or futures) to harvest the funding-rate differential, structurally close to delta-neutral.
- Funding rateA periodic payment between long and short perp holders that anchors perpetual price to spot.