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Basket (finance)
In finance, a basket is a weighted group (a linear combination) of several financial instruments. The purpose could be for example simultaneous buying or selling, for example during program trading. Certain specific specialized "baskets": * A stock market index is a basket for all the securities in a particular exchange. * A market basket is a basket for all the securities on a particular market. * A combination of individual assets, used as an underlying of a basket option. See also *Currency basket A currency basket is a portfolio of selected currencies with different weightings. A currency basket is commonly used by investors to minimize the risk of currency fluctuations and also governments when setting the market value of a country’s ... Securities (finance) {{finance-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Finance
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of financial economics bridges the two). Finance activities take place in financial systems at various scopes, thus the field can be roughly divided into personal, corporate, and public finance. In a financial system, assets are bought, sold, or traded as financial instruments, such as currencies, loans, bonds, shares, stocks, options, futures, etc. Assets can also be banked, invested, and insured to maximize value and minimize loss. In practice, risks are always present in any financial action and entities. A broad range of subfields within finance exist due to its wide scope. Asset, money, risk and investment management aim to maximize value and minimize volatility. Financial analysis is viability, stability, and profitability asse ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Instrument
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity or a contractual right to receive or deliver in the form of currency (forex); debt ( bonds, loans); equity ( shares); or derivatives ( options, futures, forwards). International Accounting Standards IAS 32 and 39 define a financial instrument as "any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity". Financial instruments may be categorized by "asset class" depending on whether they are equity-based (reflecting ownership of the issuing entity) or debt-based (reflecting a loan the investor has made to the issuing entity). If the instrument is debt it can be further categorized into short-term (less than one year) or long-term. Foreign exchange instruments and transactions are neither debt- nor equity-based and bel ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Program Trading
Program trading is a type of trading in securities, usually consisting of baskets of fifteen stocks or more that are executed by a computer program simultaneously based on predetermined conditions. Program trading is often used by hedge funds and other institutional investors pursuing index arbitrage or other arbitrage strategies. There are essentially two reasons to use program trading, either because of the desire to trade many stocks simultaneously (for example, when a mutual fund receives an influx of money it will use that money to increase its holdings in the multiple stocks which the fund is based on), or alternatively to arbitrage temporary price discrepancies between related financial instruments, such as between an index and its constituent parts. According to the New York Stock Exchange, in 2006 program trading accounts for about 30% and as high as 46.4% of the trading volume on that exchange every day. Barrons breaks down its weekly figures for program trading betwee ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stock Market Index
In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance. Two of the primary criteria of an index are that it is ''investable'' and ''transparent'': The methods of its construction are specified. Investors can invest in a stock market index by buying an index fund, which are structured as either a mutual fund or an exchange-traded fund, and "track" an index. The difference between an index fund's performance and the index, if any, is called ''tracking error''. For a list of major stock market indices, see List of stock market indices. Types of indices by weighting method Stock market indices could be segmented by their index weight methodology, or the rules on how stocks are allocated in the index, independent of its stock coverage. For example, the S&P 500 and the S&P 500 Equal Weight both covers the sam ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Basket
A market basket or commodity bundle is a fixed list of items, in given proportions. Its most common use is to track the progress of inflation in an economy or specific market. That is, to measure the changes in the value of money over time. A market basket is also used with the theory of purchasing price parity to measure the value of money in different places. Consumer basket The most common type of market basket is the basket of consumer goods used to define the Consumer Price Index (CPI). It is a sample of goods and services, offered at the consumer market. In the United States, the sample is determined by Consumer Expenditure Surveys conducted by the Bureau of Labor Statistics. The price collection is conducted by data collectors on a monthly basis, and is processed further by commodity specialists. Examples of categories included in the basket are: * Food and Beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks) * Housing (rent of primar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Basket Option
A basket option is a financial derivative, more specifically an exotic option, whose underlying is a weighted sum or average of different assets that have been grouped together in a basket. A basket option is similar to an index option, where a number of stocks have been grouped together in an index and the option is based on the price of the index, but differs in that the members and weightings of an index can change over time while those in a basket option do not. Unlike a rainbow option which considers a group of assets but ultimately pays out on the level of one, a basket option is written on a basket of underlying assets but will pay out on a weighted average gain of the basket as a whole. Like rainbow options basket options are most commonly written on a basket of equity indices, though they are frequently written on a basket of individual equities as well. For example, a call option could be written on a basket of ten healthcare stocks, where the basket was composed of ten ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Currency Basket
A currency basket is a portfolio of selected currencies with different weightings. A currency basket is commonly used by investors to minimize the risk of currency fluctuations and also governments when setting the market value of a country’s currency. An example of a currency basket is the European Currency Unit that was used by the European Community member states as the unit of account before being replaced by the euro. Another example is the special drawing rights of the International Monetary Fund. A well-known measure is the U.S. dollar index, which is used by Forex traders. There are six currencies forming the index: five major currencies – Euro, Japanese yen, British pound, Canadian dollar, and Swiss franc – and the Swedish krona. History and current use After major world currencies began to float in 1973, small countries in reaction decided to peg their currencies to one of the major currencies (e.g. U.S. Dollar, Pound Sterling). This led to a greater flu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
