Basis Quote

  

Categories: Stocks, Bonds, Trading, Investing

The basis quote is used with futures contracts (those are contracts that promise to deliver a commodity or bond or currency by a specific date at a specific price). A basis quote makes it easy to read futures quotes by referring to the price of another futures contract.

 Example

The October futures contracts for widgets is quoted at $20, and the November contract is at $30. A basis quote for the November contract would be "October + $10."

Related or Semi-related Video

Finance: What Is a Basis Point?124 Views

00:00

finance a la shmoop what is a basis point?

00:05

well one percentage point is a hundred basis points, half a percentage is 50

00:12

basis points, five percentage points is? yeah we're gonna make you do that one on [frowning man talks to camera]

00:17

your own. well the basic idea is that in very large financial transactions those

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involved need highly granular computation grids, and basis points

00:27

divid interest rates much more tightly. if a company borrows three billion

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dollars just noting that the rate is four percent is really vague. it would

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need to be noted as four point zero zero percent. why? because just one basis point [equation on screen]

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i.e. one hundredth of a percent per year on three billion dollars borrowed

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is still a lot of money. that is one basis point on three billion bucks is

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300 grand .so basis points are a real thing in high finance transactions and [smiling man talk to camera]

00:58

okay okay the answer is 500 basis points. yeah all right now you can go back to

01:03

spinning this thingy. [man spins fidget spinner]

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