what is basket trading

Hi All
Heres my daily question, ? Its mentioned several times on here without definition and its not on investopedia.

Thanks

Max

Craig beat me into the smart ass answer, so I'll give you the actual answer.

A basket refers to trading numerous instruments. It could be a lot 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 dropping, some are impartial. It'll give smaller yields over time, but a much smoother equity curve.

So appears to be a shop that sells rucksacks, suitcases, handbags and shopping bags. Good awareness to spread the risk.
Thanks guys

Max

:

---

Craig beat me into the wise ass answer, so I will provide you the real answer. A basket describes trading multiple tools. It might be a bunch of currencies, stocks, bonds, etc.. The point is to smooth out the volatility in equity swings. If you trade enough things, some are constantly winning, others are losing, some are neutral. It will give smaller yields with time, but a much smoother equity curve.

---

I enjoy the definition, easy for me to comprehend.

Think portfolio, you are going to receive it

Is this a recommended tactic? Or more for people that don't want to risk a lot of?

I assume you'd have a steady winning rate, but without the risk, where is the thrill? haha

It is when people exchange baskets for services and goods.

LOL, I suppose the thrill has to be a part of all trades, that is 1 reason why we, as traders need a little stress relief.