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 ?
There was no expense spared in the kitchen, however, as Dutch families in the kingdom joined forces to create basketfuls of mouth-watering 'bitterballen' delicacies made from meat, eggs, flour and herbs which were deep-fried at the club and handed out to the fans.
She just gathers up basketfuls of whichever clothes she thinks suit her, takes them all home, tries them on and takes what doesn't fit back to the shop.
Growing your own would make managing the last one easier, but few of us have the garden size to grow basketfuls to match commercial farms.
The outside walk-in fridges, stocked with vegetables, herbs and basketfuls of cheese, appear almost to be set into the trees.
This choreographer dispenses basketfuls of eclectic musical accompaniment.