This article explores how contango and backwardation impact the performance of commodity hedge funds, specifically those managed by commodity trading advisors. These funds invest in futures contracts for commodities, currencies, bonds, and stocks, with high risk due to leverage. Backwardation occurs when futures prices are lower than spot prices, while contango happens when futures prices are higher. Speculators can profit from these price differences. If futures prices are lower than spot prices and no additional benefits are received, a backwardation effect is present.