Basket option

Investopedia Financial Dictionary:

Basket Option

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A type of option whose underlying asset is a basket of commodities, securities, or currencies.

Investopedia Says:
A currency basket option provides a cheaper method for multinational corporations to receive/sell a basket of several currencies for one specified currency. An example would be MacDonald's buying a basket option involving Indian rupees and British pounds in exchange for U.S. dollars.

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An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them. Options Basics Tutorial

Basket option

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A basket option is a financial derivative, more specifically an exotic option, whose underlying is a (weighted) sum or average of different assets. Examples are index options, options on a portfolio, etc.

Terms	Credit spread · Debit spread · Exercise · Expiration · Moneyness · Open interest · Pin risk · Risk-free rate · Strike price · The Greeks · Volatility

Vanilla options	Bond option · Call · Employee stock option · Fixed income · FX · Option styles · Put · Warrants

Exotic options	Asian · Barrier · Binary · Cliquet · Compound option · Forward start option · Interest rate option · Lookback · Mountain range · Rainbow option · Swaption

Combinations	Collar · Fence · Iron butterfly · Iron condor · Straddle · Strangle · Covered call · Protective put · Risk reversal

Options spreads	Backspread · Bear spread · Bull spread · Box spread · Butterfly spread · Calendar spread · Diagonal spread · Ratio spread · Vertical spread · Intermarket Spread

Valuation of options	Binomial · Black · Black–Scholes · Finite difference · Garman-Kohlhagen · Put–call parity · Simulation · Trinomial · Vanna Volga method

Swaps

Basis swap · Conditional variance swap · Constant maturity swap · Correlation swap · Credit default swap · Currency swap · Dividend swap · Equity swap · Forex swap · Inflation swap · Interest rate swap · Total return swap · Variance swap · Volatility swap

Forwards and Futures

Backwardation · Commodity futures · Contango · Currency future · Financial future · Forward market · Forward price · Forward rate · Interest rate future · Margin · Pricing of Forwards · Pricing of Futures · Single-stock futures ·

Other derivatives

Credit default option · CLN · Contract for difference · CPPI · Credit derivative · ELN · Equity derivative · Foreign exchange derivative · Fund derivative · Inflation derivatives · Interest rate derivative · PRDC · Real estate derivatives · Real options

Market issues

Tax policy · Consumer debt · Corporate debt · Government debt · Late 2000s recession

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