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Basket option

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Title: Basket option  
Author: World Heritage Encyclopedia
Language: English
Subject: Basket (finance), Options (finance), Amortising swap, Ratio spread, Commodore option
Collection: Derivatives (Finance), Options (Finance)
Publisher: World Heritage Encyclopedia

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. For example an index options, where a number of stocks have been grouped together in an index and the option is based on the price of the index.

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