BACKWARDATION Definition

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BACKWARDATION is the commission paid by a seller for the postponement of a transaction on a stock exchange when prices for cash delivery are higher than for forward delivery.

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CROSS-ACCOUNTING is non-cash payment through the delivery of goods or services to satisfy a liability; a very common practice between subsidiaries of a company. See IN-KIND.

FUTURES CONTRACT is an agreement to buy or sell a specific amount of a commodity or financial instrument at a specified price on a specified future date. Futures con­tracts are traded on a commodity exchange and used both for speculation and hedging.

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