Basis Grade

Dictionary Says

Definition of 'Basis Grade'

The minimum accepted standard that a deliverable commodity must meet to be used as the actual of a futures contract. Also known as "par grade" or "contract grade."
Investopedia Says

Investopedia explains 'Basis Grade'

Basis grade is important for futures investors for maintaining uniformity, since a given commodity (e.g. oil) may vary drastically in quality. For example, the basis grade of crude futures contracts is set according to certain levels of hydrogen and sulfur in crude oil.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Actuals

    The physical ...
  2. Approved Delivery Facility

    A facility ...
  3. Cash Settlement

    A settlement ...
  4. Cash Commodity

    In futures ...
  5. Certificated Stock

    The stock of a ...
  6. Sweet Crude

    A type of oil ...
  7. Sour Crude

    The name given ...
  8. Futures Contract

    A contractual ...
  9. Futures Market

    An auction ...
  10. Reference Asset

    An underlying ...

Articles Of Interest

  1. Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  2. Derivatives 101

    Learn how to use this type of investment as an alternative way to participate in the market.
  3. Risk Tolerance Only Tells Half The Story

    Just because you're willing to accept a risk, doesn't mean you always should.
  4. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.
  5. Simplify Your Portfolio

    Faced with an overabundance of choices, many investors forget to stick to the basics.
  6. Hedging With ETFs: A Cost-Effective Alternative

    The benefits of ETFs for hedging are clear and investors of all sizes are taking notice.
  7. Minis Provide Low-Cost Entry To Futures Market

    These contracts provide access to commodities without a huge capital commitment.
  8. Forget The Stop, You've Got Options

    Using options instead of stop-loss orders adds finesse and control in limiting losses.
  9. Offset Risk With Options, Futures And Hedge Funds

    Though all portfolios contain some risk, there are ways to lower it. Find out how.
  10. The Barnyard Basics Of Derivatives

    This tale of a fictional chicken farm is a great way to learn how derivatives work in the market.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center