A basket order is a type of order used by investment firms, big institutional traders, and retail traders to buy or sell a group of securities simultaneously. Basket trading is essential for institutional investors and investment funds that wish to hold a large number of securities in certain proportions. As cash moves in and out of the fund, large baskets of securities must be bought or sold simultaneously, so that price movements for each security do not alter the portfolio allocation. Retail traders may also use basket orders if they need to do multiple trades and dont want to execute them one by one, or if they need to buy/sell two different securities at exactly the same time, such as with a pairs trade or with a covered call.

To place a basket order, traders can create and save a basket file with orders for multiple securities, modify the order parameters and define the order attributes as required, and then submit the entire basket order. Basket orders typically involve the sale or purchase of 15 or more securities and are generally used to purchase stocks. Basket orders also allow traders to create their own index by simultaneously buying or selling multiple positions.

Overall, basket orders are useful for traders who need to execute multiple trades quickly and effectively, and for institutional investors and investment funds that need to hold a large number of securities in certain proportions.