Definitions

from The American Heritage® Dictionary of the English Language, 5th Edition.

  • noun A state in which the price of a futures contract is lower than the eventual or expected spot price of the underlying commodity or security.

from The Century Dictionary.

  • noun On the London Stock Exchange, the premium paid by a seller of stock for the privilege of postponing its delivery to the buyer until the next fortnightly settling-day. See contango.

from the GNU version of the Collaborative International Dictionary of English.

  • noun (Stock Exchange) The seller's postponement of delivery of stock or shares, with the consent of the buyer, upon payment of a premium to the latter; -- also, the premium so paid. See contango.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

  • noun finance The situation in a futures market where prices for future delivery are lower than prices for immediate (or nearer) delivery. Generally arising from a near-term shortage of a commodity.
  • noun obsolete, London Stock Exchange fee paid by a seller on settlement day either to the buyer or to a third party who lends stock, when the seller wishes to defer settlement until the next settlement day.

Etymologies

from Wiktionary, Creative Commons Attribution/Share-Alike License

backward +‎ -ation

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Examples

  • "The methodology employed by the underlying index of USCI seeks to minimize the harmful effects of contagion by favoring commodities in backwardation (positive roll-yield) and longer-term contracts," he explains.

    Guru Picks: Five Gold And Commodity Best Buys Alexandra Zendrian 2010

  • "The methodology employed by the underlying index of USCI seeks to minimize the harmful effects of contagion by favoring commodities in backwardation (positive roll-yield) and longer-term contracts," he explains.

    Guru Picks: Five Gold And Commodity Best Buys Alexandra Zendrian 2010

  • "The methodology employed by the underlying index of USCI seeks to minimize the harmful effects of contagion by favoring commodities in backwardation (positive roll-yield) and longer-term contracts," he explains.

    Five Gold And Commodity Best Buys Alexandra Zendrian 2010

  • A certain degree of backwardation is normal (hence the phrase "normal backwardation").

    Backwardation, Arnold Kling | EconLog | Library of Economics and Liberty 2009

  • We are seeing signs of increasing demand for energy, evidenced by the oil market recently moving into "backwardation" -- where current oil contracts are priced higher than future ones.

    Pamela Rosenau: Winter of Content? Pamela Rosenau 2011

  • We are seeing signs of increasing demand for energy, evidenced by the oil market recently moving into "backwardation" -- where current oil contracts are priced higher than future ones.

    Pamela Rosenau: Winter of Content? Pamela Rosenau 2011

  • The result, analysts say, is "backwardation" - a situation in which futures-contract prices are lower than spot prices.

    Purchasing - Top Stories 2010

  • The result, analysts say, is "backwardation" - a situation in which futures-contract prices are lower than spot prices.

    Purchasing - Top Stories 2009

  • December Nymex crude futures dropped below the January-delivery contract, ending a situation where the front-month contract was priced higher than those further in the future, also known as backwardation.

    Crude Declines on Europe Worries; Falls Out of Backwardation David Bird 2011

  • Front-month Nymex crude ended with a 14-cent premium to the second month in the fourth day of the market price structure known as backwardation, where near-month contracts are priced higher than those further out into the future.

    Oil Jumps 4.2% on Europe Hopes; US GDP David Bird 2011

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