Basket Trading

The term basket trading refers to buying and selling bundles made up of multiple different assets (such as securities or currencies) rather than selling securities individually.

Basket trading is widely used in forex trading. By distributing an investment between multiple currency pairs using currency baskets, traders can spread risk and benefit from rate climbs across multiple currencies.

Investment vehicles based on index which track multiple stocks, commodities or other assets are another form of basket trading instrument. Examples of index-based investment vehicles include exchange-traded funds (ETFs) and index-based contracts for difference (CFDs).

Some brokers offer basket orders which allow investors to buy collections of different stocks or other securities which have been bundled into “baskets.”

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