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 periodicals archive ?
BASKETFUL OF CHEER: Members of Childwall Primary School enjoying the tournament code: at041108ebasket-7.
In Seward, fresh off a boat trip on Resurrection Bay, we head to Ray's Waterfront for a bracing cup of seafood chowder that is rich and smoky, full of potatoes, clams, salmon and halibut served with a basketful of cracker choices.
AFTER the stunner came out with a basketful of goodies, she was suddenly wearing a black sports bra.
New CEO Charles Anderson publicly announced the results of a forensic audit, airing a basketful of dirty laundry involving prior leaders.
Imagine you bring a basketful of home-grown plums to a grocer and ask that they be purchased as part of the store's effort to have, say, 20 percent of its produce organically grown (much in the way Nevada wants 20 percent renewables).
A butcher's boy, on his bike with a basketful of meat, stopped to feed the nice "doggie" he saw patrolling on the pavement.
The "you" in his poetry is both personal and all-embracing as it is in Whitman's "Song of Myself:" O'Siadhail's desire is to connect generously with everyone he can: "I bring my basketful to serve / Our table.
Another simply left a gift note with a basketful of exquisite ikat weaves.
When the prayers stopped, Lisa, Kenny, and five other young children stood at the dining-room table, which had been covered with three wide swaths of fabric, one red, one green, and one black, upon which were a basketful of fruit, another basket with many ears of corn, as well as the other symbols of Kwanzaa.
But at Wal-Mart, the consumer will leave with a basketful of home furnishings merchandise for considerably less money.