The Importance of Basis Risk in Trading Oil - Part 1
9th March 2020
Do you know really know what you are trading? Even though you may be looking for general "oil" or "gasoline" exposure when you trade a benchmark, each financial contract is priced to real physical prices in a localised area. So a seemingly insignificant global event like a small pipeline going down could have huge influence on the contract you are pricing!
Make sure you read the fine print of that contract...