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what is basket trading

  • #1
  • First Post: May 7, 2008 2:35am May 7, 2008 2:35am
Hi All
Heres my daily question, what is basket trading? Its mentioned a few times on here without definition and its not on investopedia.

Thanks

Max
Gravity goes both ways in forex...
  • #2
  • May 7, 2008 2:47am May 7, 2008 2:47am
It's when people exchange baskets for goods and services.
The breaking of a wave cannot explain the whole sea.
  • #3
  • May 7, 2008 3:11am May 7, 2008 3:11am
Craig beat me to the smart ass reply, so I'll give you the real answer.

A basket refers to trading multiple instruments. It could be a bunch of currencies, stocks, bonds, etc. The idea is to smooth out the volatility in equity swings. If you trade enough things, some are always winning, others are losing, some are neutral. It will give smaller returns over time, but a much smoother equity curve.
  • #4
  • May 7, 2008 5:55am May 7, 2008 5:55am
so sounds like a shop that sells rucksacks, suitcases, handbags and shopping bags. Good sense to spread the risk.
Thanks guys

Max
Gravity goes both ways in forex...
  • #5
  • Dec 23, 2013 12:20am Dec 23, 2013 12:20am
Quoting Dopey
Craig beat me to the smart ass reply, so I'll give you the real answer. A basket refers to trading multiple instruments. It could be a bunch of currencies, stocks, bonds, etc. The idea is to smooth out the volatility in equity swings. If you trade enough things, some are always winning, others are losing, some are neutral. It will give smaller returns over time, but a much smoother equity curve.
I like the definition, easy for me to understand.
Holy grail, pls pm
  • #6
  • Dec 24, 2013 9:31pm Dec 24, 2013 9:31pm
think portfolio, you'll get it
  • #7
  • Dec 27, 2013 6:17am Dec 27, 2013 6:17am
Is this a recommended tactic? Or more for people that don't want to risk too much?

I suppose you'd have a steady winning rate, but with no risk, where's the thrill? haha
  • #8
  • Last Post: Dec 27, 2013 6:44am Dec 27, 2013 6:44am
LOL, I suppose the thrill must be part of all trades, that's one reason why we, as traders all need a little stress relief.
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