Futures · Pro
Backwardation
What does Backwardation mean?
Backwardation describes a futures pricing relationship in which a later maturity trades below a nearer reference, often producing a downward-sloping curve. It concerns relative prices across delivery dates.
Example
A nearby contract trades at 85 while a later maturity trades at 82.
Illustrative example; not a provider’s quoted offer.Why it matters for prop traders
A downward curve is not a guaranteed forecast of falling spot prices. Distinguish curve shape from an account's realized rollover result.
Sources and further reading
The following primary sources support the terminology. Provider rules describe their own products and may change.