What is a Basing Point? The basing point is the specific predetermined geographical location used in the basing point pricing system, in which the delivered price is the same for every destination, no matter where the product is produced or from what point it is shipped. Firms that use the system set the prices of
What is the Basis Grade The basis grade is the minimum accepted standard that a deliverable commodity must meet for use as the actual asset of a futures contract. This grading is also known as par grade or contract grade. Basis grade is vital for trading in futures and to maintain uniformity within the market. BREAKING
A basis point is a common unit of measure for interest rates and other percentages in finance. Basis points are typically expressed with the abbreviations bp, bps, or bips. One basis point is equal to 1/100th of 1%, or 0.01%. In decimal form, one basis point appears as 0.0001 (0.01/100). Basis points (BPS) are used
What Is a Basis Price? Basis price is a way of referring to the price of a fixed-income security that references its yield to maturity. It is commonly used to refer to bonds and it implies the yield to maturity at the moment when an investor makes a bond purchase. The basis price is useful
What Is a Basis Quote? A basis quote is a way of quoting the price of a futures contract by comparing it to the price of its underlying asset. However, it can have slightly different meanings depending on the context. When discussing most futures contracts, basis refers to the futures price of a contract minus
What Is a Basis Rate Swap? A basis rate swap (or basis swap) is a type of swap agreement in which two parties agree to swap variable interest rates based on different money market reference rates. The goal of a basis rate swap is for a company to limit the interest rate risk it faces
What is Basis Trading? In the context of futures trading, the term basis trading refers generally to those trading strategies built around the difference between the spot price of a commodity and the price of a futures contract for that same commodity. This difference, in futures trading, is referred to as the basis. If a
What Is a Basket of Goods? The consumer price index (CPI), a common measure of inflation, measures the price change over time for a basket of goods and services. The basket is representative of consumer spending patterns, and the change in its price represents the rate of inflation faced by consumers as a whole. For example
What Is a Basket of USD Shorts? A basket of USD shorts is a forex trading strategy that involves selling the U.S. dollar against a group of currencies, instead of against a single currency pair. The currency group that the USD is traded against in such a situation is referred to as a “basket.” The strategy
What Is Basket Retention? In the insurance industry, the term “basket retention” refers to an insurance policy that covers several types of risk at once. Oftentimes, these insurance policies are less expensive compared to purchasing individual insurance policies for each of the risks insured under the policy. Key Takeaways A basket retention insurance policy is
