what is backwardation 
backwardation is when the current price or spot price of an underlying asset is higher than prices trading in the futures market understanding backwardationthe slope of the curve for futures prices is important because the curve is used as a sentiment indicator the expected price of the underlying asset is always changing in addition to the price of the future s contract based on fundamentals trading positioning and supply and demand the spot price is a term that describes the current market price for an asset or investment such as a security commodity or a currency the spot price is the price at which the asset can be bought or sold currently and will change throughout a day or over time due to supply and demand forces 