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Contango and Backwardation Review

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Uploaded by on Mar 28, 2011

Review of the difference uses of the words contango, backwardation, contango theory and theory of normal backwardation

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LICENSE: Creative Commons (Attribution-Noncommercial-No Derivative Works).

For more information about this license, please read: http://creativecommons.org/licenses/by-nc-nd/3.0/.

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  • normal contango/backwardation results from perceived demand/supply imbalance-price risk transfer. contango/backwardation results from storage cost/convenience yield difference?- correct me if I'm wrong

  • you have lost your way,

  • As a commodities investor I just want to say that backwardation is rare and frequently bullish. In a nutshell it means investors are willing to pay a premium for something (silver for example) now instead of holding off delivery until a later date. This often precludes shortages of varying degrees and likely upward price movement. The reason this is kind of counter-intuitive is because metal in 9 months should be more expensive just based on storage costs, people demand real metal, not paper.

  • lul

  • 3rd comment ! wooo

  • yay khan!

  • hi

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