backwardation definition

  • noun:
    • The situation in a futures market where costs for future delivery tend to be lower than costs for immediate (or nearer) distribution. Generally arising from a near-term shortage of a commodity.
    • charge compensated by a seller on settlement day either to your buyer or to a 3rd party who lends stock, once the vendor wants to defer settlement through to the after that settlement day.
    • owner's postponement of distribution of stock or stocks, with the permission associated with purchaser, upon repayment of reduced toward latter; -- additionally, the premium so compensated. See contango.
    • regarding the London stock-exchange, the premium compensated by a seller of stock for privilege of postponing its distribution towards buyer before after that fortnightly settling-day. See contango.

Related Sources

  • Definition for "backwardation"
    • The situation in a futures market where costs…
    • View More
  • Sentence for "backwardation"
    • A certain degree of backwardation is…
    • View More
  • Same Context for "backwardation"
65 votes

How would you define backwardation?

All the definitions on AZdictionary were written by people just like you. Now's your chance to add your own!