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What contango, backwardation mean to commodity traders - The Hindu BusinessLine


What contango, backwardation mean to commodity traders
Bavadharini KS
BL Research Bureau |
Updated on
April 24, 2021
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Contango and backwardation are two common terms that investors and traders in commodities markets often hear. Understanding them helps gauge the price, demand and supply in the market for a particular commodity.
A trader or investor refers to a market condition for a commodity as contango when the futures price (for that commodity) is trading at a premium to spot price. This difference can arise as futures contract accounts for the spot price plus the cost of carry, storage and insurance. So often, the later-date futures contract could be more than just the underlying spot price, depending on the time until delivery. ....

Commodity Traders , பண்டம் வர்த்தகர்கள் ,