Basis

This Issue in United States

Concept of Basis in Futures Trading

In this context of financial law, the following is a definition of Basis: The difference between the spot or cash price of a commodity and the price of the nearest futures contract for the same or a related commodity (typically calculated as cash minus futures). Basis is usually computed in relation to the futures contract next to expire and may reflect different time periods, product forms, grades, or locations.

Basis (value or Net)

Concept of Basis (value or Net) in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The difference between the gross basis and the carry.

Resources

See Also

• Derivatives Contract

Basis (gross)

Concept of Basis (gross) in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The difference between the relevant cash instrument price and the futures price. Often used in the context of hedging the cash instrument.

Resources

See Also

• Derivatives Contract