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Video: Contango and Backwardation

August 25, 2009 at 15:30 by Andriy Moraru

This video explains the basics of the two important concepts in commodity trading — futures contango and futures backwardation. The good part about the video is that it starts off with explaining the really basic terms and then it heads into describing the possible usage of the knowledge. The concepts of normal contango and normal backwardation are also presented. Contango is a state of the commodity market when the futures price is higher for the futures with a more distant date of expiration. Backwardation is a state of the commodity market when the futures price is lower for the futures with a more distant date of expiration.



Created by David Harper (financial risk manager) from Bionic Turtle.

If you found this video useful to you and want to see more videos like it or if you want to see a commodity trading video on some other topic, please, reply using the form below.

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