Backwardation

Business / Finance / 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.

Normal Backwardation Theory

Business / Finance / Normal Backwardation Theory: Holds that the futures price will be bid down to a level below the expected spot price. MORE

Contango

Business / Finance / Contango: Excess correlation of equity or bond returns. For example, under usual conditions we might observe a certain level of correlation of market returns. A period of contagion would be associated with much MORE

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