Financialization and speculators risk premia in commodity futures markets

Colin Carter*, C Revoredo-Giha

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
27 Downloads (Pure)


J.M. Keynes coined the term normal backwardation, a situation where a futures price for a particular expiry month is less than the expected spot price for that month. He argued hedgers pay speculators a risk premium, giving rise to normal backwardation. We study the behavior of commodity futures before and since financialization of the markets, which started about 20 years ago. We find the poor returns to managed futures in recent years are likely due to the impact of financialization and the associated outside money suppressing the futures risk premium.
Original languageEnglish
Article number102691
Number of pages27
JournalInternational Review of Financial Analysis
Early online date11 Jun 2023
Publication statusPrint publication - Jul 2023


  • Commodity market financialization
  • Futures risk premium
  • Normal backwardation


Dive into the research topics of 'Financialization and speculators risk premia in commodity futures markets'. Together they form a unique fingerprint.

Cite this