Lock in the basis today, apply the futures later
This contract protects you against adverse movements in the basis level while letting you stay in the market to capitalize on potential increases to the futures price. Fixed Basis is a great solution for growers who want to protect against adverse movements in the basis level, save on storage expenses and eliminate quality risk for delivered grain.
When is a good time to use this contract?
- When you believe the future price will increase
- When you have specific delivery requirements and are able to monitor the futures market until the time of pricing
- When you want the option of rolling the basis forward, gaining more time in the market to take advantage of price increases
What should I consider before choosing it?
- There’s always a chance the basis level will improve after you lock in your price
- There’s also a chance the futures price will decrease while your contract remains unpriced