backwardation

EnglishEdit

EtymologyEdit

backward +‎ -ation

NounEdit

backwardation (countable and uncountable, plural backwardations)

  1. (finance) The situation in a futures market where prices for future delivery are lower than prices for immediate (or nearer) delivery, generally arising from a near-term shortage of a commodity.
    • 1991, Reginald H. Howe, 'The Golden Sextant'[1]:
      gold has never gone into backwardation in any currency
  2. (obsolete, 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.

AntonymsEdit