4.6 Basis risk Basis is the difference between spot futures Basis risk arises because of the uncertainty about the basis when the hedge is closed out Options, Futures, and other Drerivatives, 5th edition o 2002 by John C. HullOptions, Futures, and Other Drerivatives, 5th edition © 2002 by John C. Hull 4.6 Basis Risk • Basis is the difference between spot & futures • Basis risk arises because of the uncertainty about the basis when the hedge is closed out