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The concept of basic transaction
Basis trading is a pricing and hedging strategy often adopted by importers. It refers to a hedging strategy that fixes the spot transaction price through the market price of imported commercial futures, thus transferring the risk of resale price fluctuation. In this way, when negotiating with exporters, importers can temporarily determine the fixed price, but fix the basis according to the futures price of the exchange. Some importers choose futures prices to set the price before shipment. Once the importer chooses a futures price on a certain day, he will also establish a short trading position on the futures exchange. When the goods are resold, the importer sells the goods at a benchmark price equal to or greater than the spot price, and closes the position in futures trading. In this way, no matter how the futures price changes, the importer will not suffer any losses in spot trading, and if the basis of selling the spot is greater than that of buying the spot, the importer will also benefit from the basis trading.

Examples are as follows:

An importer signed a corn import contract with foreign investors in the form of basis, the price was 65438+February futures price plus 15 cents (+15centsoverDec), and the delivery date was 165438+ 10. The importer's futures price of 65438+February on September 28th is more suitable, so the exporter is informed to choose the futures price of 2.36 USD/bushel on September 28th. In addition, in order to transfer the risk of price fluctuation, a short trading position is established in the futures market. 165438+12, the importer found the final buyer in China and reached a resale contract. The spot price fell to $2.45/bushel, and the futures price also fell to $2.28/bushel. When the importer reached a resale contract, he closed his position with a long position in the futures market. So spot selling basis-spot buying basis = 17- 15 = 2 cents.

As can be seen from the above example, importers not only make up for the losses in the spot market with the profits in the futures market when prices fall, but also earn a profit of 2 cents per bushel through basis pricing and hedging.