Skip to main content
Commodity

Backwardation

. In the world of finance, the concept of futures market can be quite complex. A key aspect to understand is how prices of commodities are affected in this market. When a commodity is in short supply, the near month contract will be sold at a higher price, while the distant month contract will be sold at a lower price. This is due to the spot price of the commodity being higher than the forward price. Essentially, this reflects the current demand and scarcity of the commodity. It's important to keep this in mind when making decisions in the futures market.

Related terms

OCEIL

Understand the meaning and definition of OCEIL in the context of stock market, trading, and investments.

MORE
MSCCGMF

Understand the meaning and definition of MSCCGMF in the context of stock market, trading, and investments.

MORE
Offer price

Understand the meaning and definition of Offer price in the context of stock market, trading, and investments.

MORE
NMCE

Understand the meaning and definition of NMCE in the context of stock market, trading, and investments.

MORE
GNP

Understand the meaning and definition of GNP in the context of stock market, trading, and investments.

MORE

Open Free Demat Account!

Join our 3.8 Cr+ happy customers

+91
Explore other categories
Enjoy Zero Brokerage on Equity Delivery
10 Cr+DOWNLOADS

Enjoy Zero Brokerage On Stock Investments

Get the link to download the App

Scan this QR code to download the app
Get it on Google PlayDownload on the App Store

Open Free Demat Account!

Join our 3.8 Cr+ happy customers
+91