In a Physically Settled Contract, What Is the Impact of a Storage Cost Increase on the Basis? ▴ Learn

In a Physically Settled Contract, What Is the Impact of a Storage Cost Increase on the Basis?

An increase in storage cost, which is a key component of the cost of carry, will increase the theoretical basis in a contango market. This means the futures price will rise relative to the spot price to compensate the holder for the higher expense of storing the asset until the delivery month.

How Does the Settlement Process Differ between Cash-Settled and Physically-Settled Futures?

Define ‘Contango’ and ‘Backwardation’ in the Context of Crypto Futures Pricing

What Is the Difference between Positive and Negative Basis (Contango and Backwardation)?

Differentiate between a ‘Strong Basis’ and a ‘Weak Basis’