What are Index, Basket, Portfolio?

0

Although these common street terms, many are confused when it comes defining them. These are just street terms with specific understanding. But sometimes the are used interchangeably.

Index – typically refers to the market standard aggregation of  securities or other indicators such as interest rates, with certain weight of each component.

Stock Index – It is typically contains the listed stocks.

Bond Index – It is typically contains commonly traded bonds.

Basket – Securities Basket – Typically, aggregation of non-listed securities with custom weights. These are also known as Custom Baskets or Portfolios.

Indicator based indices – Interest Rate Index, Volatility Index, Inflation Index, Yield Index etc.

Equity derivatives are mostly based on of these underliers.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here