Meaning

In full normal backwardation: the situation in a futures market where the price for future delivery of a commodity (the forward price) is lower than the price for immediate delivery (the spot price) or nearer delivery, generally arising from a near-term shortage of the commodity..

Definitions by Sense

1. In full normal backwardation: the situation in a futures market where the price for future delivery of a commodity (the forward price) is lower than the price for immediate delivery (the spot price) or nearer delivery, generally arising from a near-term shortage of the commodity.
2. A situation in which short-term interest rates are higher than long-term interest rates.
3. The situation in a stock market where the offer price for stock is lower than the bid price.
4. (obsolete) In the London Stock Exchange: a fee paid by a seller on settlement day either to the buyer or to a third party who lends stock, when the seller wishes to defer settlement until the next settlement day.

Word Forms

• backwardations

Antonyms for backwardation

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When Should You Use Backwardation?

Use backwardation when its meaning, tone and grammar fit the full sentence. A synonym is not always a direct replacement.

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