What is Basket Option?
When the underlying asset for an option is a basket of currencies, securities or commodities, it is known as Basket option.
How Is It Applied in Options Market?
Such an option works out to be a cheaper way for large companies to buy or sell a basket of numerous different currencies for a particular single currency. For example, a buy transaction of United Colors of Benetton involving Britain Pounds and Indian Rupees in exchange of Euro.