BRVX Glossary · Backwardation · Updated September 25, 2026
Backwardation describes a futures curve that slopes down: the spot price and the front-month contract cost more than contracts settling months later. Buyers are paying a premium to have the asset now, which usually points to tight supply today.
The formula
Backwardation: Future price < Spot price
Buyers pay up for the asset now more than for delivery later.
How it works
- Spot Highest price
- Near future Lower
- Far future Lower still
What causes it
- Tight physical supply, such as low oil inventories.
- A high benefit from holding the physical asset now.
- Expected price falls or heavy hedging by producers.
Why it can reward longs
A holder rolling futures sells the expiring, higher-priced contract and buys the next, cheaper one. In backwardation that roll adds to returns — the opposite of contango.
In perpetuals
A perpetual has a single price and no delivery dates, so it cannot form a curve. The nearest analogue is a perp quoted under its index price; in a standard design that gap is closed by funding flowing from shorts to longs.
On BRVX
WTI and Brent crude trade on BRVX as perpetuals, so a backwardated oil curve never turns into a roll yield there. What a WTIOIL/USDT position pays instead is funding: 0.0046% per hour for a long, plus 0.05% to open.
Questions about Backwardation
Is backwardation bullish?
It shows strong demand for the asset now; it is not a forecast of higher prices.
Is backwardation normal for oil?
Oil switches between contango and backwardation depending on inventories.
Backwardation vs contango: which is which?
In backwardation later contracts are cheaper than spot; in contango they are dearer, because storage and financing are priced in.
Backwardation: next steps on BRVX
Backwardation on ORCL/USDT today: 5x to 100x, fees 0.05% in and 0.05% out, funding 0.0046% long and 0.0046% short per hour.
Read next: Contango, Futures trading and Perpetual futures.
Leverage works both ways: a small move against you can lose you the whole margin.
Open ORCL/USDT in the app
Open appLeverage raises both gains and losses. Start with a size you are comfortable with. Not available to US persons.