How An Old Trading Technology Is Creating New Opportunities For Investors

Basket trading has been around for a while, but together with broader awareness and supporting innovations, such as fractional trading, it is becoming a way for some investors to better manage their portfolios.

What Is Basket Trading?

Basket trading is the idea that rather than buy an individual stock, like Apple
AAPL
, you buy a basket, like a collection of stocks, perhaps related to a theme like clean energy or an investment approach, like dividend investing. You determine what goes into the basket and then can simply buy and sell it as needed. Mutual funds and ETFs are based on a similar idea to basket trading. However, with basket trading there’s typically no expense ratio and you can fully customize the portfolio to your needs rather than using a fund that someone else created.