Backpricing

AAA

DEFINITION of 'Backpricing'

A pricing method used in specific futures contracts whereby the price of the commodity to be delivered is priced by the purchaser at some future date after entering into the position.

INVESTOPEDIA EXPLAINS 'Backpricing'

The price at which the purchaser can set the deliverable commodity must be relative to any monthly or periodic price found in the futures market for that particular actual.

RELATED TERMS
  1. Delivery Point

    In futures contracts, the delivery point is the place where the ...
  2. Delivery

    The action by which an underlying commodity, security, cash value, ...
  3. Delivery Instrument

    A document given to the holder of a futures contact that may ...
  4. Differential

    The amount of adjustment of the delivery location and grade of ...
  5. Actuals

    The physical commodity that underlies a futures contract or is ...
  6. Back Months

    The available futures contracts for a particular commodity that ...
Related Articles
  1. Insurance

    Futures Fundamentals

  2. Chart Advisor

    Traders Fight To Push Corn Prices Higher

  3. First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?
    Options & Futures

    Stock Safety: Top 3 Ways to Limit Your ...

  4. Investors can use derivative securities to effectively buy insurance on their individual holdings or on their portfolio as a whole.
    Options & Futures

    Can You Buy Stock Insurace? 3 Strategies ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center