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correlations (and volatility) is known to increase. So what might appear to be excessive may not be
contagion.
Contango
A market condition in which futures prices are higher in the distant delivery months.
Contingency order
Used in the context of general equities. Order to buy one security, if the trader can sell another, usually
given that certain price limits or conditions reach a certain level. Swap, switch order.
Contingent claim
A claim that can be made only if one or more specified outcomes occur.
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
Contingent immunization
An arrangement in which the money manager pursues an active bond portfolio strategy until an adverse
investment experience drives the then-available potential return down to the safety-net level. When that
point is reached, the money manager is obligated to pursue an immunization strategy to lock in the safety-
net level return.
Contingent pension liability
Under ERISA, the firm is liable to the plan participants for up to 39% of the net worth of the firm.
Continuous compounding
The process of accumulating the time value of money forward in time on a continuous, or instantaneous,
basis. Interest is earned continuously, and at each instant, the interest that accrues immediately begins
earning interest on itself.
Continuous random variable
A random value that can take any fractional value within specified ranges, as contrasted with a discrete
variable.
Contract
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral
agreement between the buyer and seller of a transaction as defined by an exchange.
Contract month
The month in which futures contracts may be satisfied by making or accepting a delivery. Also called value
managers, those who assemble portfolios with relatively lower betas, lower price-book and P/E ratios and
higher dividend yields, seeing value where others do not.
Contramarket stock
Used in the context of general equities. Stock that will fight the grain/trend of the market as whole, such as a
commodities-related stock or one in an industry out of favor with investors in a bull market.
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