Price Basing
A method of pricing commercial commodity transactions that bases these prices on related futures contract prices. This method is used by commodity producers, processors, merchants and consumers. Investopedia Says:
Using futures contracts with similar underlying commodities as a pricing benchmark for commercial commodity transactions allows smaller participants in the commercial market for commodities to factor-in different variables. Price basing permits these individuals and companies to reach a more informed price without the related cost of research. Related Terms:
Cash Commodity
Cash Price
Commodity
Futures Contract
Futures Market
Price Discovery
Spot Commodity
Spot Price
Underlying |