In the foreign exchange market, it refers to the difference between the forward and spot exchange rates, and basis = spot price-futures price. In the futures market, its meaning and application are more complicated. First, the spot price is higher than the futures price to form a positive basis, and the forward futures price is higher than the recent futures price. At this time, we generally call it futures discount or spot premium. Second, the spot price is lower than the futures price to form a negative basis, and the forward futures price is lower than the recent futures price. At this time, we generally call it futures premium or spot discount.
In terms of application, it was first produced between near and forward exchange rates, and was basically used in the field of international trade. Banks also offer discounts, usually in two or three digits. Under the direct quotation, as long as the large number comes first and the decimal number comes last, it is a discount. Under the introduction price method, on the contrary, the decimal number comes first and the large number comes last, which also means discount.