Basis risk occurs when the price of an asset and the financial instrument used to hedge it do not move perfectly in tandem. The difference between the two is referred to as the "basis." ...

Broadly, basis risk is the risk that the value of a futures contract or an over-the-counter hedge will not perfectly offset an underlying position. Other examples abound: interest futures are often ...

Cash basis can only be beneficial the farmers when they are hedged properly. The proper hedge involves creating your own cash basis through a synthetic hedge. Many traders and farmers get confused ...

Basis risk refers to the potential mismatch between the value of an asset or liability and the financial instrument used to hedge or manage its risk. This divergence can result in unexpected gains ...