backwardation

Meaning

Noun

• 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.
• 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.

Related

Opposite words

• contango
• forwardation

Origin

• backward + -ation