Thursday, January 8, 2009

Word of the Day


In futures or options trading, a market in which longer-term contracts carry a higher price than near-term contracts.
2. The premium accorded to longer maturities is a normal condition of the market and reflects the cost of carrying the commodity for future delivery.
3. (on the London stock exchange) a fee paid by a buyer of securities to the seller for the privilege of deferring payment.

See also Backwardation.

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