The change of basis shows that the futures price and spot price of commodities have changed differently. This change may be that the basis has become larger, which means that users who buy futures will get great benefits. If the price difference is negative, it means that users who buy the commodity futures will lose money. The bigger the price difference, the more money users need to pay. If the difference is zero, it means that the user will not make a profit and will not lose the investment.

First, the impact of fundamental changes.

The change of basis directly affects the effect of hedging. From the principle of hedging, it is not difficult to see that hedging actually replaces the risk of spot market price fluctuation with basis risk. Therefore, in theory, if the basis at the beginning and end of hedging remains unchanged, it is possible to achieve complete hedging. Therefore, the hedger should pay close attention to the change of basis in the process of trading and choose a favorable opportunity to complete the transaction. At the same time, because the change of basis is more stable than futures price and spot price, it provides favorable conditions for hedging transactions. In addition, the change of basis is mainly controlled by holding cost, which is much more convenient than directly observing the change of futures price or spot price.

Second, the basic differences.

Futures price is the estimated value of the spot market price by the market, and there is a close relationship between them. Because of the similarity of influencing factors, futures prices and spot prices often show the same ups and downs. However, the influencing factors are not exactly the same, so the change range of the two is not exactly the same. The relationship between spot price and futures price can be described by basis. Basis is the difference between the spot price of a commodity in a specific place and the price of a specific futures contract of the same commodity, that is, basis = spot price-futures price. The basis is sometimes positive (called reverse market at this time) and sometimes negative (called forward market at this time).

To sum up, the change of basis is an important indicator for users to judge whether futures are earned or lost. The basis will change because of the change of commodity prices. It is suggested that users who buy futures should have a good attitude and not fluctuate greatly because of the changes in futures prices.