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 ?
cried I; for the black neck of a bottle had popped out of the basket.
Nay," said one of the lasses, "but thou canst not carry three baskets all at one time.
We waited while the basket was packed, and took the boy with us.
With a grace all her own, Cecilia dived under the bed, and produced a basket of jam tarts, a basket of fruit and sweetmeats, a basket of sparkling lemonade, and a superb cake--all paid for by general subscriptions, and smuggled into the room by kind connivance of the servants.
Not for Dan the bother of filling his basket with the loose sprays, mingled with feathery elephant's-ears and trails of creeping spruce, as the rest of us, following the Story Girl's example, did.
The only produce that brought in any money was the cheese, which most of them carried in small baskets to Grenoble or its outskirts.
that they taught the savages to make wicker-work, or baskets, but they soon outdid their masters: for they made abundance of ingenious things in wicker-work, particularly baskets, sieves, bird-cages, cupboards, &c.
At a distance they could see the curious procession moving toward the wharf--the lovers, shoulder to shoulder, creeping; the lady in black, gaining steadily upon them; old Monsieur Farival, losing ground inch by inch, and a young barefooted Spanish girl, with a red kerchief on her head and a basket on her arm, bringing up the rear.
I am glad," said Lady Middleton to Lucy, "you are not going to finish poor little Annamaria's basket this evening; for I am sure it must hurt your eyes to work filigree by candlelight.
One morning he was sitting in his usual place with his basket before him, waiting to be hired, when a tall young lady, covered with a long muslin veil, came up to him and said, "Pick up your basket and follow me.
Little Benjamin took one look, and then, in half a minute less than no time, he hid himself and Peter and the onions underneath a large basket.
Athos called Grimaud, pointed to a large basket which lay in a corner, and made a sign to him to wrap the viands up in the napkins.