strong basis

Definition

A relatively small difference between cash prices and futures prices. An investor who wants to protect against rising prices would prefer that the basis weaken, thus increasing his/her unrealized gain. An investor who wants to protect against falling prices will prefer that the basis strengthen, thus minimizing unrealized loss.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
strong strong buy