Basis

What it means

Basis helps explain why a futures price may not exactly match the cash reference traders are comparing it with.

What to watch

It matters more in some products and time horizons than others, but ignoring it can create confusion when comparing markets.

Where traders usually run into this

Basis is most useful once it is tied to a concrete page, chart decision, or workflow question.

• Front Month keeps this term attached to a real glossary instead of leaving it as standalone jargon.
• Settlement Price keeps this term attached to a real glossary instead of leaving it as standalone jargon.
• Term Structure keeps this term attached to a real glossary instead of leaving it as standalone jargon.

Best next page if this term is blocking you

If you understand the definition but still do not know what to do with it, start with Front Month. That page is the fastest way to see how basis shows up in a real glossary workflow.