What Does An Inverted Market Mean? Its when a futures market where the nearer month contracts are more expensive than the distant months contracts as an inverted market occurs during periods of shortages.
Typically, the further months are more expensive because the goods have the additional costs of insurance, storage, and interest costs incurred in borrowing funds to hold the commodities.
Take a look at what has developed in crude oil prices over the last month with the October contract higher than all the back months due to demand.
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