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Meaning of backwardation

Source language: EnglishDictionary language: English

backwardation

noun

Definitions

  1. 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.

  2. (London Stock Exchange) 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.