What does normal backwardation mean?
Definitions for normal backwardation
nor·mal back·war·da·tion
This dictionary definitions page includes all the possible meanings, example usage and translations of the word normal backwardation.
Wikidata
Normal backwardation
Normal backwardation, also sometimes called backwardation, is the market condition wherein the price of a forward or futures contract is trading below the expected spot price at contract maturity. The resulting futures or forward curve would typically be downward sloping, since contracts for further dates would typically trade at even lower prices. The opposite market condition to normal backwardation is known as contango. A backwardation starts when the difference between the forward price and the spot price is less than the cost of carry, or when there can be no delivery arbitrage because the asset is not currently available for purchase. Futures contract price includes compensation for the risk transferred from the asset holder. This makes actual price on expiry to be lower than futures contract price. Backwardation very seldom arises in money commodities like gold or silver. In the early 1980s, there was a one-day backwardation in silver while some metal was physically moved from COMEX to CBOT warehouses. Gold has historically been positive with exception for momentary backwardations since gold futures started trading on the Winnipeg Commodity Exchange in 1972.
Numerology
Chaldean Numerology
The numerical value of normal backwardation in Chaldean Numerology is: 7
Pythagorean Numerology
The numerical value of normal backwardation in Pythagorean Numerology is: 6
Translation
Find a translation for the normal backwardation definition in other languages:
Select another language:
- - Select -
- 简体中文 (Chinese - Simplified)
- 繁體中文 (Chinese - Traditional)
- Español (Spanish)
- Esperanto (Esperanto)
- 日本語 (Japanese)
- Português (Portuguese)
- Deutsch (German)
- العربية (Arabic)
- Français (French)
- Русский (Russian)
- ಕನ್ನಡ (Kannada)
- 한국어 (Korean)
- עברית (Hebrew)
- Gaeilge (Irish)
- Українська (Ukrainian)
- اردو (Urdu)
- Magyar (Hungarian)
- मानक हिन्दी (Hindi)
- Indonesia (Indonesian)
- Italiano (Italian)
- தமிழ் (Tamil)
- Türkçe (Turkish)
- తెలుగు (Telugu)
- ภาษาไทย (Thai)
- Tiếng Việt (Vietnamese)
- Čeština (Czech)
- Polski (Polish)
- Bahasa Indonesia (Indonesian)
- Românește (Romanian)
- Nederlands (Dutch)
- Ελληνικά (Greek)
- Latinum (Latin)
- Svenska (Swedish)
- Dansk (Danish)
- Suomi (Finnish)
- فارسی (Persian)
- ייִדיש (Yiddish)
- հայերեն (Armenian)
- Norsk (Norwegian)
- English (English)
Word of the Day
Would you like us to send you a FREE new word definition delivered to your inbox daily?
Citation
Use the citation below to add this definition to your bibliography:
Style:MLAChicagoAPA
"normal backwardation." Definitions.net. STANDS4 LLC, 2024. Web. 26 Apr. 2024. <https://www.definitions.net/definition/normal+backwardation>.
Discuss these normal backwardation definitions with the community:
Report Comment
We're doing our best to make sure our content is useful, accurate and safe.
If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we'll take care of it shortly.
Attachment
You need to be logged in to favorite.
Log In