Inverted Market

DEFINITION of 'Inverted Market'

In the context of options and futures, this is when the current (or short-term) contract prices are higher than the long-term contracts.

BREAKING DOWN 'Inverted Market'

This usually occurs because a good is currently in short supply, which drives up prices in the short term.

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RELATED FAQS
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    Learn what differences exist between futures and options contracts and how each can be used to hedge against investment risk ... Read Answer >>
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    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
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