<Definition> Basis trading is a form of trading that focuses on the difference between a cash price and the price of the corresponding futures contract (the basis), and makes use of the relative price relationship between the two. It combines positions in opposite directions in the cash market and the futures market, and treats changes in the price difference, or its convergence, as the trading opportunity.
日本語
＜定義＞ ベーシス取引とは、現物価格と、それに対応する先物価格の差（ベーシス）に着目し、両者の相対的な価格関係を利用する取引である。現物と先物の反対方向のポジションを組み合わせ、価格差の変化や収れんを取引機会とする。
<Mechanism>
How Basis Trading Works How basis trading works. The basis is the cash price minus the futures price, usually against the nearest contract month. The premise is to watch the cash–futures difference against the cost of holding the physical commodity. (1) Buying cash and selling futures is long the basis; the reverse is short the basis. (2) Holding the physical for a period costs storage, insurance and interest (carrying charges). (3) Differences from the standard grade and delivery locations set for the futures can show in the basis. (4) Margin is posted on the futures side, and a shortfall brings a margin call. (5) Cash and futures prices converge, usually during the delivery month; positions are closed by an offsetting trade or rolled over. The opportunity lies not in the overall price level but in changes in the cash–futures difference. How Basis Trading Works Basis = Cash price − Futures price (usually the nearest month) Premise Watch the cash–futures difference against the cost of holding Cash Buy + Futures Sell (1) Building the position Buy cash + sell futures = long the basis The reverse = short the basis (2) Carrying charges Storage Insurance Interest Holding the physical costs storage, insurance and interest (3) Grade and location Grade Place Gaps from the standard grade and delivery points can show in the basis (4) Adjusting funds and margin Margin Maint. Margin is posted on the futures side; a shortfall: margin call (5) Convergence and rolling Delivery Prices converge, usually in the delivery month Close by offset or roll Not the overall price level, but changes in the cash–futures difference are the opportunity