BASKET TRADE

An mandate to sell or buy an array of securities simultaneously. Basket trading is important for investment funds and institutional investors who wants to hold big number of securities in particular proportions. As cash progress in and out of the fund, huge baskets of securities must be purchased or sold continuously, so that price movements for each security do not adjust the portfolio allocation. For a trade to be acknowledged as a "basket trade," it must typically include the purchase of 15 or more securities or the sale.