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The term basket transactions basically include two types of transactions. The first type include bids or purchases made in the ordinary course of business in connection with a “basket” of 20 or more securities, as long as a covered security does not comprise more than five percent of the basket's value. The term also signifies adjustments made to the basket in the ordinary course of business because of a change in the composition of a standardized index. These types of transactions are usually used by institutional investors or program traders to invest large amounts of money into a particular portfolio or index.