A set of stocks, securities, commodities, or currencies which are traded or tracked as one unit or single asset. Examples of baskets include index funds (which constitute baskets for all the securities listed on a particular exchange, weighted in a specific manner), market baskets (which consist of all stocks or bonds traded in a given market, weighted in a specific manner), basket options (which are exotic option contracts whose underlying is a weighted combination of individual securities) and basket swaps (which represent floating-for-floating swap agreements whose first floating rate leg is derived from the returns of a basket of underlying assets).
Baskets are often used for program trading which involves trading in securities grouped in baskets (each comprising 15 securities or more) through a computer program under preset conditions.
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