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 ?
Then he came back to the basket and took out his son Benjamin by the ears, and whipped him with the little switch.
The person who had been called Misse Cassy now came forward, and, with a haughty, negligent air, delivered her basket. As she delivered it, Legree looked in her eyes with a sneering yet inquiring glance.
Slowly the weary, dispirited creatures, wound their way into the room, and, with crouching reluctance, presented their baskets to be weighed.
A squeeze, a struggle, and Sir Henry was out, and so was Good, and so was I, dragging Foulata's basket after me; and there above us were the blessed stars, and in our nostrils was the sweet air.
But now I had no more thought of leaving the basket; indeed, nothing but death should have parted us.
But the incident on her waking this morning heightened her dread of that time when her money would be all gone; she would have to sell her basket and clothes then, and she would really look like a beggar or a wild woman, as the man had said.
On the front seat of the coach there was one of those small baskets in which travelling ladies who are too delicate to appear at a public table generally carry a supply of gingerbread, biscuits and cheese, cold ham, and other light refreshments, merely to sustain nature to the journey's end.
Then, putting the pepper-box back into the basket, Mombi lifted her left hand, with its little finger pointed upward, and said:
So, recovering from his first fear, Tip began to laugh; and the merry peals reached old Mombi's ears and made her hobble quickly to the hedge, where she seized Tip's collar and dragged him back to where she had left her basket and the pumpkinheaded man.
Dorothy went to the Witch's cupboard to fill her basket with food for the journey, and there she saw the Golden Cap.
And when the tinsmiths came, bringing with them all their tools in baskets, she inquired, "Can you straighten out those dents in the Tin Woodman, and bend him back into shape again, and solder him together where he is broken?"
The only produce that brought in any money was the cheese, which most of them carried in small baskets to Grenoble or its outskirts.