Burst Basket

AAA

DEFINITION of 'Burst Basket'

A burst basket refers to a particular type of stock transaction that involves the sale or purchase of a "basket of stocks". A basket is basically an entire portfolio of stocks (five to 50 stocks) from different sectors that are purchased in the aggregate by an equity specialist.

INVESTOPEDIA EXPLAINS 'Burst Basket'

This term is usually used in reference to a burst basket execution used in trading programs. The floor specialists would trade the component stocks in order to buy or sell the specific basket of stocks.

RELATED TERMS
  1. Basket Option

    A type of financial derivative where the underlying asset is ...
  2. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  3. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments ...
  5. Sector

    1. An area of the economy in which businesses share the same ...
  6. Stock

    A type of security that signifies ownership in a corporation ...
Related Articles
  1. Diversifying not just among different stocks, but among different assets, is how an investor can truly mitigate risk.
    Investing Basics

    Diversification Beyond Stocks

    If you think holding several stocks means you're diversified, think again - there's much more to be done to reduce portfolio risk.
  2. Investing Basics

    5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  3. Investing Basics

    5 Things To Know About Asset Allocation

    Overwhelmed by investment options? Learn how to create an asset allocation strategy that works for you.
  4. Investing Basics

    Introduction To Investment Diversification

    Reducing risk and increasing returns in your portfolio is all about finding the right balance.
  5. Mutual Funds & ETFs

    The Advantages Of Mutual Funds

    Learn how to get diversification, liquidity and professional management at an affordable price.
  6. Bonds & Fixed Income

    The Importance Of Diversification

    Without this risk-reduction technique, your chance of loss will be unnecessarily high.
  7. Insurance

    The Dangers Of Over-Diversifying Your Portfolio

    If you diversify too much, you might not lose much, but you won't gain much either.
  8. Mutual Funds & ETFs

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
  9. Retirement

    Why It Pays To Be A Lazy Investor

    Be a couch potato! This passive, but diversified, investing strategy could be for you.
  10. Brokers

    Key Differences Between M&A Advisors And Business Brokers

    For a buy, sale or partnership for one's business, one needs brokers and advisors to proceed ahead. Here are the key differences between business brokers and M&A advisors.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center