backwardation
|back-war-da-tion|
🇺🇸
/ˌbæk.wɚˈdeɪ.ʃən/
🇬🇧
/ˌbæk.wəˈdeɪ.ʃən/
near-term prices higher than future prices
Etymology
'backwardation' originates from English, formed by combining the adjective 'backward' and the suffix '-ation'.
'backward' itself comes from Old English 'bæcweard' (from 'bæc' meaning 'back' and 'weard' meaning 'toward'), and the modern noun 'backwardation' was coined in early 20th-century commodity and futures trading to describe the described market condition.
Initially related to the general idea of being 'backward' or 'behind', the term evolved in financial use to a specific meaning: a futures-market situation where near-term prices exceed future prices.
Meanings by Part of Speech
Noun 1
a market condition in futures trading in which the near-term (spot or front-month) price is higher than prices for more distant delivery dates; the futures curve slopes downward. Often indicates tight current supply relative to future supply and is the opposite of contango.
The oil market moved into backwardation as nearby contracts rose above later-dated contracts.
Synonyms
Antonyms
Last updated: 2025/12/28 05:36