Sentences with phrase «basket of stocks spread»
Not exact matches
As a result, they spread out risk much more effectively than a small, hand - picked basket of stocks or bond issues.
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When the price of the futures and that of the basket of underlying stocks converged, as they do later when the futures contracts settle, the arbitrageur closes out the hedge and captures the original spread as a profit.
Because many stocks are purchased and not just one, the risk is spread across a basket of stocks.