Backwardation: Difference between revisions
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imported>Doug Williamson m (Bracket the description of Contango, for clarity. Replace manual numbering with Wiki numbering.) |
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#In futures or options trading, an unusual market condition in which longer-term contracts carry a lower price than near-term contracts. (The usual relationship - known as contango - is that longer-term contracts carry a higher price than near-term contracts.) | |||
In futures or options trading, an unusual market condition in which longer-term contracts carry a lower price than near-term contracts. | #The extent to which a spot price of a foreign currency plus carrying cost exceeds the forward price. | ||
The usual relationship - known as contango - is that longer-term contracts carry a higher price than near-term contracts. | #More generally, any market conditions under which related market prices do not have their usual relationships to one other, potentially creating an arbitrage opportunity. (Also sometimes known as a 'back price'.) | ||
The extent to which a spot price of a foreign currency plus carrying cost exceeds the forward price. | |||
More generally, any market conditions under which related market prices do not have their usual relationships to one other, potentially creating an arbitrage opportunity. | |||
(Also sometimes known as a 'back price'.) | |||
== See also == | == See also == | ||
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* [[Forward rate]] | * [[Forward rate]] | ||
* [[Spot rate]] | * [[Spot rate]] | ||
Revision as of 09:06, 17 March 2014
- In futures or options trading, an unusual market condition in which longer-term contracts carry a lower price than near-term contracts. (The usual relationship - known as contango - is that longer-term contracts carry a higher price than near-term contracts.)
- The extent to which a spot price of a foreign currency plus carrying cost exceeds the forward price.
- More generally, any market conditions under which related market prices do not have their usual relationships to one other, potentially creating an arbitrage opportunity. (Also sometimes known as a 'back price'.)