The table below now lists the overall impacts of a change in the basis under differing scenarios. By looking at the basis historically and/or seasonally it will be much easier to assess current market conditions in both the cash and futures markets and the implications for the basis. In the table below, circle the correct word in the shaded cells. For example, in the first shaded cell, if the expected basis is negative and the basis widens, would a short hedge experience a profit or a loss? Circle either profit or loss.

The table below now lists the overall impacts of a change in the basis under differing scenarios. By looking at the basis historically and/or seasonally it will be much easier to assess current market conditions in both the cash and futures markets and the implications for the basis. In the table below, circle the correct word in the shaded cells. For example, in the first shaded cell, if the expected basis is negative and the basis widens, would a short hedge experience a profit or a loss? Circle either profit or loss. Short Hedge Long Hedge Expected Basis Basis Widens Basis Narrows Basis Widens Basis Narrows Negative Profit/Loss Profit/Loss Profit/Loss Profit/Loss Positive Profit/Loss Profit/Loss Profit/Loss Profit/Loss The table below now lists the overall impacts of a change in the basis under differing scenarios. By looking at the basis historically and/or seasonally it will be much easier to assess current market conditions in both the cash and futures markets and the implications for the basis. In the table below, circle the correct word in the shaded cells. For example, in the first shaded cell, if the expected basis is negative and the basis widens, would a short hedge experience a profit or a loss? Circle either profit or loss. Short Hedge Long Hedge Expected Basis Basis Widens Basis Narrows Basis Widens Basis Narrows Negative Profit/Loss Profit/Loss Profit/Loss Profit/Loss Positive Profit/Loss Profit/Loss Profit/Loss Profit/Loss