Back month Futures
- Thread starter daytrader85
- Start date
I will be a efficient vice president
Dick "rubi" Cheney.
This is a function of the "fear premium".
A few people alluded to this this ....
I'd pay more to have it now -- and know that I have it;
than pay for something to be delivered at a point later in the future which might not be available when I need it.
Also called backwardation, commodities markets are in that state over 60% of the time which is why it's often profitable to get long a few months out the curve and ride it up and into prompt as opposed to rolling a front month position forward.
D
A few people alluded to this this ....
I'd pay more to have it now -- and know that I have it;
than pay for something to be delivered at a point later in the future which might not be available when I need it.
Also called backwardation, commodities markets are in that state over 60% of the time which is why it's often profitable to get long a few months out the curve and ride it up and into prompt as opposed to rolling a front month position forward.
D
:eek: