Backwardation and Contango

This video provides a quick review of the concept of contango and backwardation. These two are opposite of each other.

A market is said to be in Backwardation, when the prices of a futures contract is trading below the expected spot prices at the contract maturity.

A market is said to be in Contango, when the price of a futures contract is above the expected spot price.

Series NavigationWhat is Backwardation?
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Related posts:

  1. What is Contango?
  2. What is Backwardation?
  3. Minimum Variance Hedge Ratio
  4. Understanding Spot FX Transactions
  5. The Term Structure of Interest Rates

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