Business, Legal & Accounting Glossary
A currency trading strategy that involves selling U.S. dollars short against a group or “basket” of other currencies. Instead of trading one currency against another, this strategy allows traders to reduce risk through diversification. When the dollar strengthens, it appreciates at different rates against other currencies. The “basket of shorts” strategy protects a trader from the risk of selling the dollar short against a single currency that experiences an unusually large drop in value.
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This glossary post was last updated: 20th November, 2021 | 0 Views.