backwardation

American  

[bak-wer-dey-shuhn] / ˌbæk wərˈdeɪ ʃən /

noun

1. (on the London stock exchange) the fee paid by a seller of securities to the buyer for the privilege of deferring delivery of purchased securities.

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backwardation British  

/ ˌbækwəˈdeɪʃən /

noun

1. the difference between the spot price for a commodity, including rent and interest, and the forward price

2. (formerly, on the Stock Exchange) postponement of delivery by a seller of securities until the next settlement period

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Etymology

Origin of backwardation

First recorded in 1840–50; backward + -ation

Compare meaning

How does backwardation compare to similar and commonly confused words? Explore the most common comparisons:

• contango vs. backwardation

Example Sentences

The X platform was full of people who couldn’t spell backwardation six months ago suddenly explaining why silver is overvalued.

From MarketWatch

The backwardation seen in pricing for physical silver in London’s over-the-counter market at present — whereby short-term or spot pricing is higher than forwards — is the highest in decades, according to Campbell.

From MarketWatch

Such low stock levels typically trigger steep backwardation—where near-date prices jump above longer-dated contracts—and support a continued rise in prices.

From The Wall Street Journal

Further evidence of the short squeeze is the backwardation in the silver market, whereby spot prices are higher than those of futures contracts.

From MarketWatch

The market structure called backwardation occurs when spot prices are higher than future prices, giving energy firms little incentive to pay to store fuel for future months.

From Reuters