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Ebooks / Commodity Markets / Chapter 9 of 9

Backwardation and Contango

Securities & MarketsSeptember 22, 2011 ยท 1 min read

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.