[f. prec. vb. + -ATION (after sbs. from vbs. of Latin origin as retard-ation).] Stock Exchange term for a percentage paid by a seller of stock for the privilege of keeping back or delaying its delivery till the following account or to any other future day agreed upon.
1830. Times, 16 June, 5/4. The scarcity of Greek stock, in which so much has been sold on speculation, that it could not be obtained for delivery, without paying a premium…. This is called, in Stock Exchange language, ‘backwardation.’
1850. Keyser, Law Stock Exch., The term Backwardation is employed when stock is more in demand than money, and a premium is given to obtain the loan of stock against its value in money.
a. 1860. C. Fenn, Eng. & For. Funds (1883), 127. ‘Backwardation’ is paid by the speculator for the fall, or the Bear, in order to postpone delivery until the following account.
1880. Society, 3 Sept., 16. The Bear a good contango loves, The Bull a backwardation.
1883. Pall Mall Gaz., 11 Sept., 9/2. At the opening 1/4 backwardation to 1/4 contango was charged.
