Basis risk

Basis risk

The risk that the price of a future will vary from the price of the underlying cash instrument as expiry approaches. See also Convergence.

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Part of Speech: noun
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Industry/Domain: Financial services
Category: General Finance
Company: Reuters
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Related terms

basis risk

Banking; Investment banking

Price risk inherent in forward transactions. Risk that the correlation between the price of a financial future and that of the underlying spot instrument could change so ...

basis risk

Financial services; Commodity exchange

The risk associated with an unexpected widening or narrowing of basis between the time a hedge position is established and the time that it is lifted.

basis risk

Agriculture; Agricultural programs & laws

The possibility of unexpected variation in basis and a resulting loss of expected revenue when a futures contract is liquidated and the commodity sold on the cash market.

basis risk

Financial services; Finance

The risk that the price of a future will vary from the price of the underlying cash instrument as expiry approaches.

basis risk

Financial services; General Finance

Uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk.

basis risk

Financial services; General Finance

The risk that the price of a future will vary from the price of the underlying cash instrument as expiry approaches. See also Convergence.

hardship assistance

Financial services; General Finance

A financial assistance given out in times of personal fincancial hardship, e.g. loss of job, insurance, or property.

government grants

Financial services; Accountancy; Finance; General Finance

Awards of financial assistance in the form of money by governments to an eligible grantee with no expectation that the funds will be paid back. This does not include technical ...

bankers' acceptances (BA)

Financial services; General Finance

Sometimes known as time drafts, these are bearer-form short-term non-interest-bearing notes sold at a discount, redeemed by accepting banks for full face value at maturity.

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Financial services; General Finance

The sale of a share and its repurchase shortly after the beginning of a new tax year. This allows shareholders to register a capital loss or profit for tax purposes while ...

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Financial services; General Finance

An international organization that fosters international monetary and financial co-operation and serves as a bank for central banks and international financial organizations. It ...

Buoni Ordinari del Tesoro (BOT)

Financial services; General Finance

Italian Treasury bills with maturities of three, six and 12 months, issued at a discount.

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