Basis is the price an investor pays for a security plus any out-of-pocket expenses. It is used to determine capital gains or losses for tax purposes when the stock is sold. Also, for a futures contract, the difference between the cash price and the futures price observed in the market.

Webster Dictionary Meaning

1. Basis
- The foundation of anything; that on which a thing rests.
- The pedestal of a column, pillar, or statue.
- The ground work the first or fundamental principle; that which supports.
- The principal component part of a thing.
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