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. Actuals

    The physical commodity that underlies a futures contract or is ...
  3. Current Delivery

    A type of futures contract that requires the delivery of the ...
  4. Assignable Contract

    A futures contract with a provision permitting the contract holder ...
  5. Certificated Stock

    The stock of a commodity that has been inspected by qualified ...
  6. Back Months

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

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  2. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.
  3. Options & Futures

    How to Use Commodity Futures to Hedge

    Both producers and consumers of commodities can use futures to hedge. We explain, using a few examples, how to achieve commodity hedging with futures.
  4. Brokers

    OptionsXpress Vs. OptionsHouse: Which One To Pick?

    OptionsXpress and OptionsBroker -- each offers a price mix and set of services suitable for certain investors based on their trade approach and priorities.
  5. Options & Futures

    The Future Is Now: All About Futures ETFs

    A new security class - futures ETFs - is gaining popularity. We tell you how futures ETFs work and offer tips.
  6. Chart Advisor

    Now Is The Time To Trade Industrial Metals

    Traders are turning their attention to large-cap industrial metals companies because a rebound in the global markets will likely send share prices of the underlying metals higher.
  7. Investing Basics

    The Strange New World Of The Bitcoin Exchange Futures Market

    We explain the basics of the Bitcoin exchange and futures market.
  8. Options & Futures

    A Quick Guide for Futures Quotes

    Here is a quick guide to futures quotes.
  9. Trading Strategies

    Trade Weekly & Up Your Reward Potential

    Weekly patterns sidestep the HFT maelstrom by aligning trade entries and exits with the edges of longer-term trends.
  10. Chart Advisor

    Cocoa Prices Setting Up For A Move Lower

    Cocoa prices have been trending lower over the past several months and the recent bearish crossover between the 50-day and 200-day moving averages suggest that the long-term downtrend is gaining ...

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center