What are Index, Basket, Portfolio?


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.



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