Coronavirus Sends VIX Into Backwardation—Here’s What That Means

Usually when “contango” comes up in a markets story, one reaction might be “Huh?” while another might be “Where’s my oil tanker?” That’s because contango and its sister term, backwardation, are used most often in the context of futures markets for commodities. But they can pop up in any derivatives market and during turmoil driven by the spread of the coronavirus, volatility futures have, unusually and perhaps alarmingly, slipped from contango into backwardation. Here’s how to understand what th