Back month Futures

Discussion in 'Commodity Futures' started by daytrader85, Apr 24, 2008.

  1. TRADATOR----- If I ever start a Fan Club, you'll be the Vice President. :)
     
    #11     Apr 28, 2008
  2. :D

    I will be a efficient vice president

    Dick "rubi" Cheney.



    :D
     
    #12     Apr 28, 2008
  3. TraDaToR

    TraDaToR

    Thanks a lot... It's the first I 'm offered such a prestigious position...
     
    #13     Apr 29, 2008
  4. 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
     
    #14     Apr 29, 2008
  5. :eek:
     
    #15     Apr 29, 2008