backwardation

  1. Noun.  (finance) 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. Noun.  (obsolete, London Stock Exchange) 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.

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This entry was last updated on RefTopia from its source on 3/20/2012.