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.

BREAKING DOWN '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.

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RELATED FAQS
  1. How do I use a "basket" option?

    A basket option is an option with an underlying asset "basket" of securities, currencies or commodities. Basket options are ... Read Answer >>
  2. How is the basket of goods selected for the Consumer Price Index?

    Read about alterations in the market basket for the consumer price index, a measure of approximate consumer price changes ... Read Answer >>
  3. Who employs the specialists at New York Stock Exchange (NYSE)? Do they work for themselves, ...

    Before we address this question, let's review what specialists do. Specialists are people on the trading floor of an exchange, ... Read Answer >>
  4. A _______ is a person on the trading floor of certain exchanges who holds an inventory ...

    The correct answer is d. A good example of an exchange using the specialist system is the NYSE. Each stock listed on the ... Read Answer >>
  5. What's the difference between a Nasdaq market maker and a NYSE specialist?

    What's the main difference between a specialist and a market maker? Not much. Both the New York Stock Exchange (NYSE) specialist ... Read Answer >>
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