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

At the same time, the current backwardation in the gas market—when front-month prices trade above winter contracts—is providing little economic incentive for traders and utilities to inject additional gas into storage ahead of winter.

From The Wall Street Journal • Jun. 2, 2026

The oil futures market currently trades in backwardation.

From MarketWatch • Apr. 13, 2026

“The commodity landscape is littered with backwardation vs. contango trades gone bad. Now the Department of Energy is out there rolling the dice.”

From The Wall Street Journal • Mar. 13, 2026

However, near-term supply remains tight, analysts said, with immediate oil prices trading above later-dated contracts—a market structure known as backwardation.

From The Wall Street Journal • Jan. 21, 2026

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

From MarketWatch • Dec. 30, 2025