Talk:Basis risk
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Clearer definition
[edit]Basis risk can be more generally described as the risk of offsetting investments thought to be hedging each other turning out to be less perfect hedges than initially expected. You though you bought apples and sold apples, but it turned out there are two kinds of apples that people are usually indifferent to, and you bought Bramley apples and sold Cox's and suddenly for some reason there is a price difference between the two.
Examples are IRS/Bond basis, cross currency basis, onshore/offshore basis, EONIA/SONIA basis. —Preceding unsigned comment added by 193.108.78.10 (talk) 11:32, 23 July 2008 (UTC)
Expand introduction with Hedging Theory and Source
[edit]I am proposing to expand the introductory section of this article with a sustained 100 word segment that illustrates the notion of the optimal hedge ratio and the nonlinear nature of basis risk through citations of John C. Hulls textbook. This primarily acknowledges the current banner desiring additional expansion and citation. Tomttom20 (talk) 21:49, 5 December 2025 (UTC)