Basisbreite

Basisbreite refers to a concept in financial markets, particularly in derivatives trading. It quantifies the difference between the spot price of an underlying asset and the price of a futures contract for that same asset. This difference is also known as the basis. Therefore, basisbreite is essentially the width or magnitude of this basis.

A positive basisbreite indicates that the futures price is higher than the spot price. This situation, known as contango, typically occurs when there are costs associated with holding the underlying asset until the futures contract expires, such as storage costs, insurance, or financing costs. In contango markets, investors might profit by selling the spot asset and simultaneously buying the futures contract, locking in a price difference.

Conversely, a negative basisbreite means the futures price is lower than the spot price. This is called backwardation. Backwardation often suggests that there is high immediate demand for the underlying asset, or that the market expects the price to fall in the future. Traders might exploit backwardation by buying the spot asset and selling the futures contract.

The basisbreite is a crucial indicator for traders and investors as it reflects market expectations about future supply and demand, as well as the cost of carry. It influences hedging strategies, arbitrage opportunities, and the overall profitability of positions in futures markets. The size of the basisbreite can vary significantly depending on the asset class, the time to expiration of the futures contract, and prevailing market conditions.