What Are Basket Orders?

A basket is a simple container made of wood or some other stiff material and is designed to hold goods. The goods that are contained in the basket may be food, vegetables, fruits, meats, or other products. Although most baskets are made of animal products, other materials including human hair, wicker, cane, or other metal wire are also used. Most baskets are woven manually. Basket weaving is an art that involves the use of different kinds of fibre, needle, yarn or cord and is considered an art in some parts of the world.


Many forms of basket order exist, with the most common types being the general basket order and the specialty basket order. General basket order means that a company orders a basket from another company on the basis of specifications provided by the client. Materials in the basket are selected based on the price, quality, size and location of the client. Specialty baskets, on the other hand, require additional steps before the items are packed and shipped to the client. These specialized baskets are usually made according to the price, quality, location and type of product that the trader wants to trade in. Traders who offer these special baskets can either do it themselves or they may hire services from outside companies that specialize in this area of business.

In general, however, baskets perform the following functions: they facilitate the trade by acting as a link between the distributor and the trader, they reduce costs and increase liquidity, and they provide certain standards of security for both. They also reduce inventory turnover because stock cannot be easily lost or misplaced. They are also used to settle disputes between distributors and traders, and they act as a platform for stock trading activities. In this way, a basket order execution system ensures that transactions go smoothly and that there are no delays in process. It also ensures that the right amount of securities are in custody and available for trade. As soon as a stock in a basket reaches the investor, the order is executed.

Many institutions use baskets to manage their inventories. These institutions have various categories of securities: equity, fixed income securities, money market instruments, commodity, government and municipal bonds, and foreign securities. Some hedge funds use baskets in order to mitigate the risks associated with trading in foreign markets. Certain baskets include only securities in the money markets while others include agricultural, industrial, and housing indexes.

Brokerages provide assistance to institutions and other traders who want to use a basket trade execution system. These companies usually contract with a few trading corporations or groups. Before using a basket trade system, a trader must find one that suits his needs best, depending on the nature of his business. Certain factors need to be considered, such as price and volume, flexibility, security, and speed.

A retail trader may use an electronic communication network to place and receive multiple trades each day. Because of the advantages of this technology, more traders are turning to electronic commerce systems for placing and receiving orders. An electronic communication network offers more flexibility for a retail trader’s basket order methodology. Because this technology allows multiple trades to be placed at the same time, it eliminates the possibility of human error and reduces the overall costs of placing and receiving an order.