What is Basis Trade? The basis trade is a popular strategy used by hedge funds to profit from the price difference between U.S. Treasury bonds and their corresponding futures contracts. This price gap—known as the “basis”—exists due to supply-demand imbalances or regulatory constraints. Traders use high levels of leverage, sometimes up to 100x, to bet … Continue reading Understanding the Basis Trade: Unraveling Recent U.S. Market Volatility