A Brief History of Basket Trading
A basket is typically a cylindrical container which is made of wicker or wood and is made from various materials, such as wood, cane, and runner. Though most baskets nowadays are made of synthetic material, some materials like horsehair, bales, or wire may still be used. Generally, a basket is woven manually by hand. This weaving process is often done on a loom. Some baskets may are hand woven using a machine, but most basket weavers still weave baskets by hand.
Basketry refers to weaving of baskets by hand or on a loom. It is a collective term for all art forms of basketry. The word basketry comes from the German term baktron, which means a round or oval plait. In its modern sense, basketry is any sort of textile made by man in whatever form, shape, and size. Such textile arts could be as minute as a button or as intricate as a basket full of flowers.
A typical early American basketry market would contain anything from fruit, wheat, beans, tea, eggs, and pork. Native Americans, who were primarily fishermen, would also trade their small fishing nets for large amounts of saltpeter, blackberries, lichens, peanuts, walnuts, pumpkins, squash, melons, gourds, corn, pumpkins, cabbages, and onions. Early Dutch traders were known to use wicker baskets to carry spices and other products from inland to coastal areas. During the colonial period, American entrepreneurs used wicker baskets, which they found in European markets, to make local basket trades with Native Americans for valuable trading goods such as tobacco, beads, pottery, blankets, saltpeter, hoes, and more.
Because there were no financial institution to standardize the pricing of stocks until the eighteenth century, individual inventors frequently began selling stocks among themselves. The first documented record of basket trading comes from the Parma alphabets, which were discovered by archaeologists in the late twentieth century. Around this same time, Europeans began using the English language to communicate with one another across vast distances. Thus, the term ‘basket’ was born. By the eighteenth century, basket trading had become widespread and was common throughout Europe, the United States, Australia, Japan, India, and much of Africa.
Stock baskets also began to be referred to as “baskets” because traders would sometimes use them as storage units for stock, much like a box. For example, in the early eighteen hundreds the average trader would hold about one stock basket per day. In order to make sure that the weights in the baskets were evenly distributed, traders would place a particular order with a basket maker or supplier. They would then go to work, weighing the stocks each morning and making any needed adjustments before trading in the day’s shares.
The primary reason that traders used a basket trade was to reduce the risk of holding multiple stocks. By investing in only a few select companies, the trader could reduce his risk factor. He also had much more control over the portfolio, since he only had to purchase a basket of a certain number of shares. Today, baskets are used by institutional investors all around the world, but the primary purpose remains to reduce risk. Some people will purchase baskets containing many different currencies for the purpose of diversifying their portfolios. Others will hold one currency basket, while holding other currencies; this allows them to have a greater diversification.