Definition:
An index basket is a collection of securities that represent a sector or market index. For example, the basket for the gold, silver, and precious metals index (XAU) is a collection of mining company stocks. One equity in the XAU basket is ABX, a gold mining company.
The amount of shares and stocks in a basket will determine the price of said basket. The price-calculation will depend on whether the index is market-weighted or price-weighted.
