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What is the significance of normal Backwardation and normal Contango?

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What is the significance of normal Backwardation and normal Contango?
posted Jul 4, 2017 by Ananya Saha

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Normal backwardation, also sometimes called backwardation, is the market condition wherein the price of a commodities' forward or futures contract is trading below the expected spot price at contract maturity. Contango is a situation where the futures price of a commodity is above the expected future spot price. Contango refers to a situation where the future spot price is below the current price, and people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity.

answer Jul 4, 2017 by Mukul Chag
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