The risk that the position being hedged by a futures position is not affected in the same manner as the instrument underlying the financial futures contract, is referred to as

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Basis risk refers to the risk that the basis (difference between the futures price and the underlying asset price) widens or narrows, leading to a mismatch between the hedged position and the underlying instrument. This can occur due to factors specific to the underlying instrument, such as changes in supply and demand or local market conditions, leading to a decoupling of the futures price from the underlying asset price.

The Risk That the Position Being Hedged by a Futures