Basket


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Basket

Applies to derivative products. Group of stocks that is formed with the intention of either being bought or sold all at once, usually to perform index arbitrage or a hedging program.

Basket

1. A group of securities often, but not always, derivatives, bought and sold as a single unit. Institutional investors often purchase baskets in order to pay only a single commission on an exceptionally large transaction. A basket is also useful in an index arbitrage transaction.

2. See: Currency basket.

basket

A preassembled group of securities. Baskets allow individual investors to acquire a group of securities with a single trade while paying one commission.

Basket.

A basket is a group of securities that have been put together for a specific investment purpose and are traded as a unit.

Authorized ETF participants accumulate baskets that include all of the securities tracked by a specific index. The baskets then become creation units for an ETF that tracks that index.

Basket also refers to a group of 15 or more securities with a combined value of $1 million that institutional investors and arbitrageurs assemble to use in program trading. The program trading is driven by sophisticated computer software that may automatically trigger trading when prices, or spreads between prices, hit predetermined levels.

Since baskets represent large values, basket trading can cause abrupt price changes in a stock or group of stocks included in a basket and may even have a dramatic effect on the overall market.

References in classic literature ?
He took a tremendous jump off the top of the wall on to the top of the cat, and cuffed it off the basket, and kicked it into the garden-house, scratching off a handful of fur.
Then he came back to the basket and took out his son Benjamin by the ears, and whipped him with the little switch.
Tom's basket was weighed and approved; and he looked, with an anxious glance, for the success of the woman he had befriended.
Tottering with weakness, she came forward, and delivered her basket.
Again I thought of abandoning that basket, but did not.
Athos then made him a sign to take up his basket and to walk on first.
There we sat and stripped the faded leaves and stems from our spoil, making up the blossoms into bouquets to fill our baskets with sweetness.
Perhaps," continued Elinor, "if I should happen to cut out, I may be of some use to Miss Lucy Steele, in rolling her papers for her; and there is so much still to be done to the basket, that it must be impossible I think for her labour singly, to finish it this evening.
Bullfrog," said my wife, coolly taking the basket from my hands and replacing it on the front seat.
Then, putting the pepper-box back into the basket, Mombi lifted her left hand, with its little finger pointed upward, and said:
Dorothy went to the Witch's cupboard to fill her basket with food for the journey, and there she saw the Golden Cap.
The only produce that brought in any money was the cheese, which most of them carried in small baskets to Grenoble or its outskirts.