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Derivatives: Market Info and awareness
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Basis: Generally in futures trading, refers to the difference between futures price and the spot price of a commodity, index or other traded item. In the context of credit derivatives, often refers to the difference between the CDS spreads and the spreads prevailing in the cash market, say, on a loan or a bond of the same entity. A credit asset is supposed to have a positive basis (or a negative carry) when the cost of buying protection, that is, default premium, is more than the spread on the credit asset. Conversely, negative basis.