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Backwardation |
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Backwardation A market condition in which futures prices are lower in the distant delivery months than in the nearest delivery month. This may occur when the costs of storing the product until eventual delivery are effectively subtracted from the price today. The opposite of contango.
Backwardation. If the price of a futures contract that expires in the near term is higher than the price of a contract with the same terms that expires at a later date, the relationship between the two is called backwardation. More typically, the contract with the longer-term expiration commands a higher price. That relationship is called contango. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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