Basis = spot price-futures price.
Futures spot spread refers to the difference between the spot price of the hedged assets and the futures contract price used for hedging. Since both the futures price and the spot price will fluctuate, the basis will also fluctuate during the validity period of the futures contract.
The uncertainty of futures spot spread is called basis risk. The key to reduce basis risk and realize hedging is to choose a highly matched hedging futures contract.
The risk of futures spot spread is directly related to the basis difference in hedging liquidation. When investors hold spot and short futures positions for hedging, the basis on the hedging closing date expands and investors make profits. On the contrary, when an investor will buy an asset in the future and hold a long future positions for hedging, and the basis on the hedging settlement date will expand, the investor will lose money.