Backpricing

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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.

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