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. Diversification Beyond Stocks
    Investing Basics

    Diversification Beyond Stocks

  2. 5 Tips For Diversifying Your Portfolio
    Investing Basics

    5 Tips For Diversifying Your Portfolio

  3. 5 Things To Know About Asset Allocation
    Investing Basics

    5 Things To Know About Asset Allocation

  4. Introduction To Investment Diversification
    Investing Basics

    Introduction To Investment Diversification

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center