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What Is the Term for a Situation Where the Futures Price Is Lower than the Spot Price?

Backwardation, indicating that the spot price is higher than the futures price.
Greeks.Live24.11.25

What Is the Term for a Situation Where the Futures Price Is Lower than the Spot Price?

This situation is known as "backwardation." It is typically seen as an abnormal market condition where the current spot price is higher than the price of the futures contract for a later date. This can indicate an immediate shortage of the underlying asset or strong negative market sentiment about the future price.

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