Short The Basis
A futures strategy involving the purchase of a futures position to hedge against a future commitment to deliver the underlying commodity. Investopedia Says:
Opposite to a short hedge, shorting the basis implies that the investor will be taking a short position in the commodity and a long position in the futures contract. This strategy is used to hedge a position by locking in a future spot or cash price and thereby removing the uncertainty of rising prices. Related Terms:
Basis
Cash Price
Commodity
Delivery
Futures Contract
Hedge
Short
Spot Price |