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Trends & Analysis
News

TJX announces strong sales, dividend hike

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Who wins the S&P 500’s bank battle?

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USD/JPY edges lower on economic data

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Li Auto shares race ahead on upbeat earnings

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Can anything stop NVIDIA?

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Gold rises on soft dollar, geopolitical concerns

Trends & Analysis
News

TJX announces strong sales, dividend hike

News

Who wins the S&P 500’s bank battle?

News

USD/JPY edges lower on economic data

News

Li Auto shares race ahead on upbeat earnings

News

Can anything stop NVIDIA?

News

Gold rises on soft dollar, geopolitical concerns

Basis definition

In trading and investment, basis refers to the difference between an asset’s spot price and its futures price for delivery on a predetermined date. In other words, basis is the cost of carrying the asset from the present date to the future delivery date. Basis is an important concept in the financial markets, particularly in commodity trading. It can affect the profitability of hedging strategies and traders can monitor it to gauge market supply and demand.

An example of basis in commodity trading

A trader wants to trade wheat, which currently has a market price of $5 per bushel, while the futures price for the delivery of a bushel of wheat in three months’ time is $6 per bushel. This creates a basis of $-1, and the negative basis indicates that the futures price is higher than the spot price.

Start trading with ADSS

ADSS offers a range of global markets for traders, with CFD opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.

 

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Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.

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ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.