Editing Contango (section)

== Origin of term ==
The term originated in 19th century England<ref>[http://dictionary.reference.com/browse/contango Contango] from [[Reference.com]]</ref><ref>{{cite journal|date=1803-02-28|journal=York Herald | page=2 |title=York, &c. news |quote=Yesterday was Settling Day in Consols, and Monday next the Settling of Omnium.  Owing to the great scarcity of money, the '''Contango''' on both is extremely great, nearly equal to 15 per cent. for money, from account to account.}}</ref> and is believed to be a corruption of "continuation", "continue"<ref>{{cite book| title=Significant Etymology (or Roots, Stems, and Branches of the English Language) | first=James | last=Mitchell | publisher=[[William Blackwood and Sons]]| year=1908 | page=[https://archive.org/details/significantetym00mitcgoog/page/n316 302] | quote=Contango, probably a corruption of continue, a Stock Exchange phrase, meaning a sum of money, or a percentage, paid for accommodating a buyer in carrying an engagement to pay money for speculative purchases of stock, over to next account day; contango day, the second day before settling day. | url= https://archive.org/details/significantetym00mitcgoog}}</ref> or "contingent". In the past on the [[London Stock Exchange]], contango was a fee paid by a buyer to a seller when the buyer wished to defer settlement of the trade they had agreed. The charge was based on the interest forgone by the seller not being paid.

The purpose was normally speculative. Settlement days were on a fixed schedule (such as fortnightly) and a speculative buyer did not have to take delivery and pay for stock until the following settlement day, and on that day could "carry over" their position to the next by paying the contango fee. This practice was common before 1930, but came to be used less and less, particularly after options were reintroduced in 1958.

This fee was similar in character to the present meaning of contango, ''i.e.'', future delivery costing more than immediate delivery, and the charge representing cost of carry to the holder.