[Verse 1] In the futures market, prices dance and sway Two structures guide the trading day When futures cost more than the spot right now That's contango, let me show you how Storage costs and interest rates combine Push the future price above the line [Chorus] Contango climbs up high, futures above the spot Backwardation dips down low, spot price is what you've got Remember "C" goes up like climbing to the sky "B" goes back and down, that's how we classify Contango up, backwardation down These market structures wear the trading crown [Verse 2] But when convenience yield takes the lead Or supply is tight for current need The spot price rises past futures ahead Backwardation's born, just like we said Oil in shortage, gold in high demand Spot exceeds futures across the land [Chorus] Contango climbs up high, futures above the spot Backwardation dips down low, spot price is what you've got Remember "C" goes up like climbing to the sky "B" goes back and down, that's how we classify Contango up, backwardation down These market structures wear the trading crown [Bridge] Storage costs push contango high Convenience yield makes backwardation fly Normal markets show contango's face But shortages put backwardation in its place [Verse 3] Chart the curve from month to month ahead See if prices climb or fall instead Upward slope means contango's here Downward slope makes backwardation clear Understanding curves will guide your way Through the futures market every day [Chorus] Contango climbs up high, futures above the spot Backwardation dips down low, spot price is what you've got Remember "C" goes up like climbing to the sky "B" goes back and down, that's how we classify Contango up, backwardation down These market structures wear the trading crown [Outro] Two simple words to rule them all Contango rises, backwardation falls Master these curves and you will see Futures market clarity
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