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.) |
imported>Brianlenoach@hotmail.co.uk (Spacing.) |
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#The extent to which a spot price of a foreign currency plus carrying cost exceeds the forward 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'.) | #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 == | ||
Revision as of 17:25, 12 December 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'.)
