Glossary › basis

Trading glossary · advanced

basis

The difference between today's price of something and the price agreed today for a deal that happens later.

The fuller meaning

The gap between the spot (cash) price and a futures price, in commodity markets usually written as spot minus futures. It reflects storage, interest and scarcity, and it shrinks toward zero as expiry approaches because the futures price must meet the spot price.

basis.

Related words

at the money · backtest · backwardation · call option · contango · data snooping · delta · edge · entry trigger · exercise