Basis Quote

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DEFINITION of 'Basis Quote'

A method for simplifying and shortening the quoted price of a futures contract. Used in the futures markets, a basis quote gives the variation above or below the price of a futures contract.

BREAKING DOWN 'Basis Quote'

For example, a basis quote for pork bellies at $3 above January expiry can easily be converted to the actual price by finding the price of a January pork belly contract and adding $3 to the price.

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RELATED FAQS
  1. Do hedge funds and mutual funds invest in commodities in high inflation environments?

    Hedge funds and mutual funds are very different types of investment vehicles.The contents of a hedge fund are determined ... Read Full Answer >>
  2. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  3. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  4. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  5. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
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    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>

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