Unexpected changes in the basis between the placing and the lifting of a hedge. Basis risk is in excess of convergence.

The risk resulting from using a hedging instrument that is imperfectly matched to the investment being hedged; in general, the risk that the basis will change in an unpredictable way.Related Terms: Basis 

The difference between an index and a specific portfolio of losses (relying upon that index) as the underlying basis for a hedge. For example, insurer A's loss portfolio will not be the same [..]

Price exposure associated with variation in the relationship between a physical or cash price and the appropriate NYMEX reference. These risks may be associated with location, product specifications, [..]

The risk that the price of a future will vary from the price of the underlying cash instrument as expiry approaches.

The risk of unexpected change in the relationship between futures and spot prices.

 The risk that basis moves in an unexpected manner.  

The uncertainty as to whether the cash-futures spread will widen or narrow between the time a hedge position is implemented and liquidated.

The risk associated with an unexpected widening or narrowing of basis between the time a hedge position is established and the time that it is lifted.

The lack of certainty regarding the basis when a hedge may be removed. Price risk is substituted by basis risk by hedging.

Basis risk is the degree of imperfect change in the relationship between the price used to value a position and the price of the instrument used to hedge the position.

The risk of the basis between the cash price and the future price widening or narrowing between the time a hedge position is implemented and liquidated.

This is the risk of loss from hedging market exposures with i nstruments whose change in value does not exactly offset value changes in the position being hedged. The mismatch could be in terms of maturity, the underlying instrument or some other characteristics. Refers to a proposal by the Basle Committee for new capital rules that might applied i [..]

Unexpected changes in the basis between the placing and the lifting of a hedge. Basis risk is in excess of convergence.

When dealers hedge risk the process is often less than perfect. This leads to fluctuations in their profit and loss. The risk associated with this change in value is sometimes referred to by dealers a [..]