Basis

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Basis can mean:

  • In futures, the difference in value between the future and the spot price (cash price minus futures price)

Basis is used to determine the best time to buy or sell, when to use the futures market to hedge a purchase or sale, the month in which to place the hedge.[1]

  • In options, the difference in value between a call option and a put option

References

  1. Understanding Basis. Oxfordfutures.com.