Basis Grade


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."


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.

  1. Futures Market

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  4. Certificated Stock

    The stock of a commodity that has been inspected by qualified ...
  5. Cash Commodity

    In futures trading, the cash commodity is delivered for payments. ...
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    A facility authorized by an exchange to be used as a location ...
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