{"id":6538,"date":"2025-01-10T06:19:04","date_gmt":"2025-01-10T06:19:04","guid":{"rendered":"https:\/\/www.alcircle.com\/blog\/?p=6538"},"modified":"2025-01-10T06:19:45","modified_gmt":"2025-01-10T06:19:45","slug":"hedging-with-jorge-episode22-borrowing-in-contango","status":"publish","type":"post","link":"https:\/\/www.alcircle.com\/blog\/hedging-with-jorge-episode22-borrowing-in-contango","title":{"rendered":"Hedging with Jorge #Episode22: Borrowing in Contango"},"content":{"rendered":"\n<p>In trading, understanding the concept of borrowing and its connection to contango can open doors to significant profit opportunities. Let\u2019s break it down.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"youtube-embed\" data-video_id=\"Ezrgb0uc3fA\"><iframe loading=\"lazy\" title=\"Hedging with Jorge #Episode22: Borrowing in Contango\" width=\"696\" height=\"392\" src=\"https:\/\/www.youtube.com\/embed\/Ezrgb0uc3fA?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>What is Borrowing?<\/strong><\/p>\n\n\n\n<p>Borrowing involves buying a commodity or asset for a near-term date and selling it for a further date. For instance, if you\u2019re short in April and want to move your position forward, you buy April and sell June. This action is termed \u201cborrowing.\u201d<\/p>\n\n\n\n<p>Enter Contango: In a contango market, prices for future dates are higher than for nearer dates. For example, if April is priced at $2,500 and June at $2,530, the $30 difference becomes your gain. Borrowing in contango allows you to buy low (near-term) and sell high (future), making it a lucrative strategy.<\/p>\n\n\n\n<p><strong>Key Takeaways:<\/strong><\/p>\n\n\n\n<p>Borrowing = Buying near, selling further.<br>Contango = Future prices &gt; Near-term prices.<br>Borrowing in contango = Profits from price differences.<\/p>\n\n\n\n<p>Whether you\u2019re dealing with February to March or April to June, borrowing lets you move your short positions forward while capitalising on market dynamics.<\/p>\n\n\n\n<p>Stay tuned for our next deep dive into borrowing strategies, because understanding these nuances can help you maximise returns!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In trading, understanding the concept of borrowing and its connection to contango can open doors to significant profit opportunities. Let\u2019s break it down. What is Borrowing? Borrowing involves buying a commodity or asset for a near-term date and selling it for a further date. For instance, if you\u2019re short in April and want to move [&hellip;]<\/p>\n","protected":false},"author":89,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-6538","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-open-forum-for-aluminum-community-blog"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hedging with Jorge #Episode22: Borrowing in Contango<\/title>\n<meta name=\"description\" content=\"In trading, understanding the concept of borrowing and its connection to contango can open doors to significant profit opportunities\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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