What Is Basis Risk How Does It Affect The Outcome Of Long Hedge And Short Hedge Respectively When The Hedge Position Is Closed Out?
What Is Basis Risk How Does It Affect The Outcome Of Long Hedge And Short Hedge Respectively When The Hedge Position Is Closed Out? Basis risk is accepted in an attempt to hedge away price risk. If the basis remains constant until the trader closes out both of his positions, then he will have successfully