A future contract rarely has exactly the same price as the spot price of the underline asset, during its life. As long as the contract approaches the delivery date the two prices are converging and only on the last trading day they are equal in order to eliminate arbitrage (riskless profit) opportunities. The difference between the spot price of the underline asset and a specific future contract price is called basis.

Basis = Spot price – Future contract price

In that sense, every future with different delivery date might have a different basis and it can be positive or negative. The longer the delivery date is the bigger the basis tends to be.

This discrepancy between the two prices is due to various factors that are incorporated in futures prices. In commodity futures for example, among other factors, we have to take into consideration the storage cost. Suppose that the price of a WTI crude oil contract with delivery after 6 months is $101/barrel (total contract value $101,000) and the spot price of WTI oil is now $100/barrel (negative basis). Suppose also that the only parameter that the future incorporates is only the storage cost (although in reality other parameters also affect its price) and the storage cost/barrel for six months is $1. In this case the contract must incorporate the fact that if someone buys it he/she will evade the storage cost of $1/barrel for the six months and this must be priced in the future.

Another example is the futures on stocks with dividend. The future contract price most of the times is lower than the spot price of the stock (positive basis) in order to incorporate the fact that by being long in futures of the stock doesn’t give you the right to earn dividends.