Convenience yield

darko/Speculative Bubble

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Convenience yield. 2 connected concepts: Forward curve (related to), Contango (related to).

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Community · Forward curve

Summary

A convenience yield is an implied return on holding inventories.

10 words

Connections2

market factor causing backwardation
When the convenience yield is high, the forward curve may slope downward, a state known as backwardation.
SourcesWikipedia Wikidata Wikipedia Wikidata
Influences the spread between spot and futures prices
Convenience yield is the benefit of holding the physical commodity; when it is low or zero, the market is more likely to enter a state of contango.
SourcesWikipedia Wikidata Wikipedia Wikidata

Facts