Contango and Backwardation?

49 day(s) ago

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gretchen

Backwardation (sometimes incorrectly referred to as "backwardization") is a futures market term: it means a downward sloping forward curve (as in an inverted yield curve): one says that the forward curve is "in backwardation" (or sometimes: "backwardated").

Formally, it is the situation where, and the amount by which, the price of a commodity for future delivery is lower than the spot price, or a far future delivery price lower than a nearer future delivery.

The opposite market condition to backwardation is known as contango.

Posted 49 days ago

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