Basket Trading

May 15, 2012

A Basket Trade is also known as a portfolio trade or a program trade.

  1. It involves a sale of a number of securities together at a time (usually greater than 15)
  2. Usually used by portfolio managers so that the allocation of the portfolio doesn’t change with time
  3. The trade consists of buy/sale of securities in the proportion in which they are present in the portfolio

 

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