Basis risk

Basis Risk
Basis Risk definition :
Unexpected changes in the basis between the placing and the lifting of a hedge. Basis risk is in excess of convergence.
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Basis risk
Basis risk is the risk that the change in price of a hedge may not match the change in price of the asset it hedges. It may occur because of how a hedge is constructed, or because of the terms of the derivative contracts.

Basis risk
The uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk. ...

basis risk
in Asset-Liability Management , the risk that changes in interest rates will cause interest-bearing deposit liabilities to reprice at a different rate than interest-bearing assets, creating an asset liability mismatch .

basis risk
spread risk
Spread risk is risk (usually market risk or earnings risk) due to exposure to some spread. It often arises with a long-short position or with derivatives. A synonym for spread risk is basis risk.

BASIS RISK - The risk to a holder of financial instruments that a change in prevailing interest rates w...
BASIS SWAP - A type of interest rate swap in which the net cash flows that the parties agree to exchang...

Basis risk
The extent to which valuations for derivatives securities do not accurately reflect valuations for the underlying securities on which they are based. Sometimes exploited by investors engaging in arbitrage.

Basis Risk
The risk associated with an unexpected widening or narrowing of basis between the time a hedge position is established and the time that it is lifted.
Bear ...

Basis Risk: The type of risk in which the exposure and the hedging instrument are not perfectly matched or correlated.
Bearer Bond: The bond certificate is not recorded as owned by a particular investor and is itself, therefore, negotiable.

Basis Risk - Is the risk in the basis time series. This can be influenced by many variable although the total impact is less than the exposure for a naked position. When a hedge is placed, price risk is transformed into basis risk.

BASIS RISK
The uncertainty as to whether the cash futures spread will widen
or narrow between the time a hedge position is implemented and
liquidated.

Basis risk The uncertainty about the at the time a hedge may be lifted. substitutes for .
Basket trades Related: .

Basis risk
Interest rate
Risk-free interest rate
Term structure of interest rates ...

Basis Risk
The risk that offsetting investments in a hedging strategy will not experience price changes in entirely opposite directions from each other.

Basis Risk
The risk that the price movement of a hedge will differ from the price movement of the hedged position. For example, in a deposit-taking, credit-granting FI, the variable spread between a lending rate and a borrowing rate.

Basis risk
Unexpected changes in the basis between the placing and the lifting of a hedge. Basis risk is in excess of convergence.

ZEBRA - Zero Basis Risk Swap - A swap agreement between a municipality and a financial intermediary.
Also known as a "perfect swap" or "actual rate swap".

See also: Actual, Arbitrage, Basis Grade, Basis Risk, Cash Settlement, Cost Basis, Delivery Month, Narrow Basis, Tax Basis, Wide Basis
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Assay
Basis point
Basis Point - BPS
Basis Price
Basis Quote ...

Price expressed in terms of yield to maturity or annual rate of return.
Basis risk
Uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk.
Basket ...

The uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk.
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Basis Risk
The risk that the price of a futures contract will be different from the price of the underlying cash instrument as expiry approaches....(Read more)
Basket Trade ...

See also: Expense, Solvency, Insolvency, Funding, Substitutes