Talk:Backwardation
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I strongly agree it should be merged with contango. They are just the two sides of a coin. If the current price is higher than the forward price, we call it backwardation. If the current price is lower than the forward price, we call it contango.
Indeed, these pages should be merged
I disagree completely. In electronics, attenuation and gain are essentially the same thing with opposite signs, yet there is no mention of gain on the attenuation page and vice versa, and certainly not a combined page for the two. Keep them separate.
As long as they refer to one another, separate writeups make sense. Once you start merging related materials in futures, where do you stop?
The two articles should be kept separate. They are different things. They may refer to each other and that is helpful but someone who looks up one of the terms should be led to a distinct article that deals with its own topic.
We should take into consideration that we speak about the Encyclopedian term and in this case we should sepparate all the deffinitions one from another, otherwise we need to put all the definitions and clarifications (concerning derivatives for example) into one article. —Preceding unsigned comment added by 160.83.32.14 (talk) 13:02, August 30, 2007 (UTC)
They should not be merged. We wouldn't think of merging good/bad, black/white, positive/negative and other opposites. Why then should BW/CT be merged? Sure, one could say that negative contango equals backwardation and vice versa just as "cold" could be substituded by "less warm" or something similar,, meaning we actually only need one notion. However, as it is the market participants have chosen to coin two different words and who are we to say it's redundant? —Preceding unsigned comment added by 80.169.21.62 (talk) 09:20, 21 September 2007 (UTC)
- Do not merge: Just because they're related that is no reason they can't each have their own article (should we merge Luke Skywalker and Darth Vader just because they're related?). For one thing, each is a topic long enough for its own article. As long as you have a prominent link to Backwardation and an explanation that it is the inverse of Contango - and vice versa - I see no need to merge the articles. ElectricRay 16:16, 1 October 2007 (UTC)
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This article appears to describe "normal backwardation" which is a specific term and not the same as "backwardation". Contango and "normal backwardation" are opposites. Backwardation is something different. Someone more expert than I should correct this and add an article about "normal backwardation". Mark —Preceding unsigned comment added by 136.182.158.153 (talk) 14:59, 21 May 2008 (UTC)
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I find this page extremely heavy going for what is in fact a reasonably simple term. Pregnant? Couldn't is start out with a simpler explaination:
"Backwardation is a term used principally by traders of commodity futures. Futures markets allow their participants to buy and sell commodities (grain, oil, metals, etc) at various dates in the future. Backwardization occurs when it is cheaper to have a product delivered in the future. While many scenarios can lead to backwardization agricultural commodities will typical exhibit this behavior if an abundant harvest is predicted."
The historical explaination is entirely opaque. If I'm understanding it correctly i think it could read:
"The term arose originally from the situation where a seller, having promised to deliver a good on a particular day, would pay a fee to back out of the deal and delay deliver. Those payments would lower the price the buyer actually paid in the end creating a situation where later delivery was cheaper. A market that generally exhibited lower prices in the future was said to be backward since presumably in that situation all the seller would rush to sell immediately; that they aren't appears backward."
But I doubt it's that exactly captures why the term arose. 66.30.202.56 (talk) 01:50, 23 May 2008 (UTC)
