BACKWARDATION, or, as it is more often called for brevity, BACK, a technical term employed on the London Stock Exchange to express the amount charged for the loan of stock from one account to the other, ...
Backwardation is a market condition where spot prices exceed forward prices. Contango is the opposite condition, where forward prices exceed spot prices.
Backwardation definition :
A market condition in which futures prices are lower in the distant delivery months than in the nearest delivery month.
Backwardation is the opposite of Contango, and refers to a situation when the current price for a commodity (called the 'spot price') is higher than the price for a far future delivery.
Backwardation is the opposite of forwardation. It is a state in which the price of a future is less than the spot price of the underlying commodity.
The reverse of contango is called 'backwardation'. This is where the current price of an asset goes higher than the future price. This may be because of short term supply issues.
Definitions of ’backwardation’ and meaning of ’backwardation’ are from the book publication, QFINANCE - The Ultimate Resource, © 2009 Bloomsbury Information Ltd.
Oil crises due to a supply reduction and disequilibria in the energy markets tend to drive the oil market in a backwardation situation. The contrary of Backwardation is Contango.
Editor: Claudio DICEMBRINO
© 2009 ASSONEBB ...
Similar financial terms
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected spot price.
Termbox ...
pricing structure in commodities or foreign-exchange trading in which deliveries in the near future have a higher price than those made later on. Backwardation occurs when demand is greater in the near future. See also contango .
Backwardation in futures contracts was called "normal backwardation" by economist John Maynard Keynes.
Contango Vs. Normal Backwardation
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Futures Fundamentals ...
Backwardation
The situation where an investor on the Forward Market postpones a bear position to the next fortnight period, speculating on a continuous falling of the prices: delay of delivery of sold securities until the next settlement day.
Backwardation - A theory developed in respect to the price of a futures contract and the contract's time to expire.
Backwardation
A situation which occasionally occurs in futures or options markets, whereby current commodities or contracts with an earlier maturity date have a higher value than contracts with a later maturity date. (Opposite of Contango).
Backwardation A market condition in which are lower in the distant months than in the nearest delivery month.
Balance sheet Also called the statement of financial condition, it is a summary of the assets, liabilities, and owners' .
Backwardation - Is the market condition whereby the deferred or more forward delivery months are at a progressive discount to the spot or nearby month. This is also known as an inverted market. This is opposite to a contango or carrying charge market.
BACKWARDATION
Market situation in which futures prices are lower in each
succeeding delivery month. Also known as an inverted market.
The opposite of contango.
Backwardation is a futures market term: the situation in which, 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.
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected spot price.
Normal deviate
Related: Standardized value ...
backwardation Theory that suggests futures contracts nearer to expiration trade at premium... bad debt Accounts receivable that will likely remain uncollectable and will be written...
In the reverse but abnormal situation, when the market was in an oversold position and a buyer demanded delivery but the seller could not respond even by borrowing shares, the buyer would be paid a 'Backwardation charge', also known as undha badla.
For instance, if the gold quotation for February is $160.00 per ounce and that for June is $155.00 per ounce, the backwardation for four months against January is $5.00 per ounce. (Backwardation is the opposite of contango). See Inverted Market.
A term indicating that futures prices of a commodity are lower than spot prices. If a commodity moves into backwardation the markets expect prices to fall. Opposite: Contango.
Français: Déport
Español: Mercado invertido
Bad debt: ...
Backwardation
In the futures market, a condition in which a price is lower in the distant delivery months than in the near delivery months. Normally, the ...(Read more)
Balance Of Payments ...
It will be noted that (b) is only possible for those holding the asset but not needing it until the future date. There may be few such parties if short-term demand exceeds supply, leading to backwardation.
[edit] Fixed income securities ...
A bank assurance of funds obtained by an issuer of commercial paper to protect the CP investor from default. The issuer pays a commitment fee to the bank.
Backwardation ...
If the opposite is true, and the price of a longer-term contract is lower than the price of one with a closer expiration date, the relationship is described as backwardation.
Contingent deferred sales load ...
That relationship is described as contango.If the opposite is true, and the price of a longer-term contract is lower than the price of one with a closer expiration date, the relationship is described as backwardation.
 See also: Banks, Futures price, Contango, Saving, Values
  
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