Meaning BASIS RISK: Uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk
More terms such as Basis risk in Dictionary B.
- Definition Break-Even Point:
- Examples at which a transaction produces neither a gain nor a loss. In the context of options, the term has the additonal definitions:1. Long calls and short uncovered calls: strike price plus premium.2 basis risk definition.
- Definition Buy On Opening:
- Examples Buying at the beginning of a trading session at a price within the opening range basis risk explain.
- Definition Breakout:
- Examples security's price above a resistance level (commonly its previous high price) or a drop below a level of support (commonly the former lowest price.) A breakout is taken to signify a continuing basis risk what is.
- Definition Bid:
- Examples potential buyer is willing to pay for a security. Sometimes also used in the context of takeovers where one corporation is bidding for (trying to buy) another corporation. In trading, we have the bid basis risk meaning.
- Definition Benchmark Issue:
- Examples Also called on-the-run or current-coupon issue or bellwether issues. In the secondary market, the benchmark issue is the most recently auctioned Treasury issues for each maturity basis risk abbreviation.