Get to know Backwardation better with 10+ real example sentences, the meaning.
Backwardation in a sentence
Backwardation meaning
- In full normal backwardation: the situation in a futures market where the price for future delivery of a commodity (the forward price) is lower than the price for immediate delivery (the spot price) or nearer delivery, generally arising from a near-term shortage of the commodity.
- A situation in which short-term interest rates are higher than long-term interest rates.
- The situation in a stock market where the offer price for stock is lower than the bid price.
Using Backwardation
- The main meaning on this page is: In full normal backwardation: the situation in a futures market where the price for future delivery of a commodity (the forward price) is lower than the price for immediate delivery (the spot price) or nearer delivery, generally arising from a near-term shortage of the commodity. | A situation in which short-term interest rates are higher than long-term interest rates. | The situation in a stock market where the offer price for stock is lower than the bid price.
- In the example corpus, backwardation often appears in combinations such as: backwardation is, in backwardation, called backwardation.
Context around Backwardation
- Average sentence length in these examples: 23.2 words
- Position in the sentence: 8 start, 5 middle, 6 end
- Sentence types: 19 statements, 0 questions, 0 exclamations
Corpus analysis for Backwardation
- In this selection, "backwardation" usually appears near the start of the sentence. The average example has 23.2 words, and this corpus slice is mostly made up of statements.
- Around the word, normal, widest, month, indicates, jumped and experienced stand out and add context to how "backwardation" is used.
- Recognizable usage signals include are in backwardation and argued that backwardation is abnormal. That gives this page its own corpus information beyond isolated example sentences.
- By corpus frequency, "backwardation" sits close to words such as aal, aalto and aardvark, which helps place it inside the broader word index.
Example types with backwardation
The same corpus examples are grouped by length and sentence type, making it easier to see the contexts in which the word appears:
They want the strip to stay in backwardation. (8 words)
By the end of March, the market shifted narrowly into backwardation. (11 words)
This structure, called backwardation, indicates a perception of tight prompt supply. (11 words)
Settlement days were on a fixed schedule (such as fortnightly) and a short seller did not have to deliver stock until the following settlement day, and on that day could "carry over" their position to the next by paying a backwardation fee. (42 words)
The fee here did not indicate a near-term shortage of stock the way backwardation means today, it was more like a "lease rate", the cost of borrowing a stock or commodity for a period of time. (37 words)
In more recent years, a backwardation in equities quoted on the London Stock Exchange has come to signify the unusual occurrence of an individual equities quote whereby the bid appears to be higher than the offer. (36 words)
Example sentences (19)
Normal backwardation, also sometimes called backwardation, is the market condition wherein the price of a forward or futures contract is trading below the expected spot price at contract maturity.
By the end of March, the market shifted narrowly into backwardation.
They want the strip to stay in backwardation.
US diesel futures have also shifted into the widest backwardation since March, a market structure where prompt contracts trade at premiums to longer-dated ones.
This structure, called backwardation, indicates a perception of tight prompt supply.
Backwardation is a function of near-term demand being higher than the available supply.
Brent crude has benefited by the backwardation of the near-term physical curve in recent days.
Brent’s six-month backwardation jumped to the highest level since September 2013 as the outage raised concerns about obtaining near-term supplies.
Near-term futures for Brent crude, the benchmark for more than half the world’s oil, are trading higher than later contracts in a market structure known as backwardation that typically signals a supply squeeze.
Those long the curve and observers of the market’s general view that a scarce and perishable resource found in a consistent number of products wouldn’t assume backwardation experienced mark-to-market losses.
A contract in backwardation will increase in value until it equals the spot price of the underlying at maturity.
Backwardation very seldom arises in money commodities like gold or silver.
For example, if it costs more to lease silver for 30 days than for 60 days, it might be said that the silver lease rates are "in backwardation".
In more recent years, a backwardation in equities quoted on the London Stock Exchange has come to signify the unusual occurrence of an individual equities quote whereby the bid appears to be higher than the offer.
It is argued that backwardation is abnormal, and suggests supply insufficiencies in the corresponding (physical) spot market.
It is often called 'normal backwardation' as the futures buyer is rewarded for risk he takes off the producer.
Settlement days were on a fixed schedule (such as fortnightly) and a short seller did not have to deliver stock until the following settlement day, and on that day could "carry over" their position to the next by paying a backwardation fee.
The backwardation contract selling today is lower than the spot price, and its trajectory will take it upward to the spot price when the contract closes.
The fee here did not indicate a near-term shortage of stock the way backwardation means today, it was more like a "lease rate", the cost of borrowing a stock or commodity for a period of time.
Common combinations with backwardation
These word pairs occur most frequently in English texts:
- backwardation is 3×
- in backwardation 3×
- called backwardation 2×
- the backwardation 2×
- backwardation in 2×