A futures market in which the nearer months are selling at price premiums to the more-distant months. Related: Premium.
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In options and futures, a situation where prices on contracts with short expirations or maturities are higher than those with longer expirations or maturities. This is rather unusual, as most investors demand a premium for longer term investments. An inverted market usually occurs when the underlying securities have low supply in the short term.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
In futures or options trading, a market with nearby contracts having a price that is higher than more distant contracts. This unusual situation may occur when the underlying asset is heavily in demand. Also called backwardation. Compare contango.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.