Trading Basics
Crystallisation
When a position is closed the trader crystalises the profit or loss.
Other Trading Basics
Cash or Spot Market
Also known as a spot market, cash markets are different to futures contracts, as commodities are traded immediately for cash at the current market price.
Backwardation
Backwardation occurs when a bid price exceeds the ask price.
This usually occurs when stock is suspended or under a share repurchase scheme.
It can also mean that a futures contract will trade at a higher price when it is coming close to expiring.
The opposite of backwardation is known as contango.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.
