Basket Option

An option contract in which the underlying asset consists of several different assets. For example, a basket call may give one the right, but not the obligation, to buy more than one currency at the strike price (which is denominated in a currency other than any in the underlying). A basket option provides a way for a corporation to hedge against several different risks at the same time and to do so more cheaply. However, a rainbow option is exposed to the risk that only some, rather than all, of the underlying assets will move in the direction benefiting the holder. A basket option is also called a rainbow option.

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The IRS has not commented on how much in unpaid taxes it is seeking from Renaissance, but in 2014 the Senate Permanent Subcommittee on Investigations issued (http://www.hsgac.senate.gov/download/report-abuse-of-structured-financial-products-misusing-basket-options-to-avoid-taxes-and-leverage-limits) a report that called Renaissance "the largest basket option user," and estimated the firm avoided $6.8 billion in taxes.

Will Trump's IRS Pick Help Robert Mercer Eliminate His Company's $7 Billion Tax Bill?

Notice 2015-73 revokes Notice 2015-47 and specifically identifies basket option contracts and substantially similar transactions as listed transactions.

Basket contracts as listed transactions and transactions of interest

Treasury and IRS noted in their joint guidance their concern that taxpayers are using basket option contracts to "inappropriately defer income recognition and convert ordinary income and short-term capital gain into long-term capital gain."

IRS, Treasury Close Alt Investment Tax Loophole

Basket option transactions occur between hedge funds and banks.

Taxing Times

There is no simple closed-form expression for this basket option price.

Minimizing the risk of a financial product using a put option

Saudi ArabiaAEs central bank governor on Thursday said the basket option for the planned single currency was one option though not the perfect solution.

IMFAEs Lipsky Sees Sluggish Recovery

Saudi Arabia's central bank governor on Thursday said the basket option for the planned single currency was not the perfect solution.Aa

IMF urges vigilance despite expected global economic recovery

Vanmaele, in press, Moment Matching Approximation of Asian Basket Option Pricing, Journal of Computational and Applied Mathematics.

Bounds for right tails of deterministic and stochastic sums of random variables

They have approximately twenty-five different pre-arranged gift pack and gift basket options, which can be quickly and conveniently browsed on their gift basket quick comparison page, which includes pricing.

Gift Baskets

Other gift basket options include premium baskets meant to impress, and goodie baskets meant to be shared with the entire office.

Ingallina's Box Lunch Kicks Off the Holiday Season with New Holiday Party Platters and Gift Baskets

The hotel is offering three picnic basket options, and services of an Andaz Picnic Host to arrange a perfect picnic.

-Andaz 5th Avenue Announces Picnic Service for Guests

Available in a variety of clever themes -- including a Taste of Italy, Sushi Starter Kit, Beers from Around the World and Bedtime Bath for Baby -- Roundy's showcases its full array of gift basket options in catalogs available in all stores.