Saturday, November 19, 2011

How can you tell if a futures market is in contango or backwardation?

If you have some typical futures prices, how do you know if the market is in contango or backwardation?|||look at the forward ladder....ie, all the futures prices for all the dates going forward.


if they are increasing from near date to far date, theyre in contango


if theyre decreasing, theyre in backwardation





cheers

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