Backwardation: Difference between revisions

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1.
1. ''Futures trading.''


In futures or options trading, an unusual market condition in which longer-term contracts carry a lower 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.   
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2.
2. ''Foreign exchange - spot price.''


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.




3.
3. ''Market conditions - price relationships.''


More generally, any market conditions under which related market prices do not have their usual relationships to one other, potentially creating an arbitrage opportunity.   
More generally, any market conditions under which related market prices do not have their usual relationships to one other, potentially creating an arbitrage opportunity.   
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* [[Contango]]
* [[Contango]]
* [[Cost of carry]]
* [[Cost of carry]]
* [[Forward contract]]
* [[Forward rate]]
* [[Forward rate]]
* [[Futures contract]]
* [[Spot rate]]
* [[Spot rate]]
[[Category:Manage_risks]]
[[Category:Financial_products_and_markets]]

Latest revision as of 07:51, 30 July 2022

1. Futures trading.

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.)


2. Foreign exchange - spot price.

The extent to which a spot price of a foreign currency plus carrying cost exceeds the forward price.


3. Market conditions - price relationships.

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