How Does the Basis Typically Behave as a Futures Contract Approaches Expiration?

As a futures contract approaches its expiration date, the basis typically converges toward zero. This convergence is a fundamental principle of futures markets.

Since the futures contract and the spot asset represent the same underlying asset at the delivery date, their prices must become equal. Arbitrageurs actively trade on any deviation from this convergence, ensuring the basis moves closer to zero as the final settlement time approaches.