What is a Basket Trade?

Answer:
A basket trade is an order to purchase

or to sell a set of 15 or more securities. This type of trade is utilized to invest large amounts of money into a specific portfolio or index. Investors that are considered institutional investors or program traders often use basket trades.

For many types of investors, basket trades are a helpful investment strategy. They can assist fund managers who want to rework a portfolio of investments. They can also assist individual investors that want to address specific areas of interest. To limit the monetary risk because of movements by the index, investors may choose to purchase or sell all the constituents of an index by utilizing a basket trade. One advantage of basket trading includes the ability for investors to create baskets of stocks according to specific investment needs.
A financial advisor should be able to assist you when you’re ready to implement a basket trade.