Regulators have authorized three exchanges to sell a new type of security that allows investors to bet on the direction of the stock market as a whole rather than purchasing individual stocks.

Two of the exchanges - the American Stock Exchange and the Philadelphia Stock Exchange - Friday began trading the instruments, known as stock baskets. Amex is calling its product an Equity Index Participation and Philadelphia has named its a Cash Index Participation.The instruments are priced to reflect increases and declines in broad market indexes such as the Standard & Poor's 500-stock index.

In March, the SEC had approved the products, including the Chicago Board Options Exchange's Value Index Participation, but two large future exchanges asked the SEC to delay the authorization while they sought to block trading with lawsuits in a federal appeals court.

The SEC on Friday denied that request saying the Chicago Mercantile Exchange and Chicago Board of Trade had failed to demonstrate they had a good chance of winning their suits or they would be irreparably harmed if trading went forward.

The futures exchanges, which likely would lose business to the stock baskets, contend that the instruments are a thinly disguised stock index future and must be approved by the Commodity Futures Trading Commission, not the SEC. Stock index futures also allow investors an opportunity to bet on overall direction.

All of the index participation products are based on the current value of various indexes of stocks. Investors receive quarterly cash payments equal to a proportionate share of any regular cash dividend declared on the component stocks of the underlying index.

In the first day of trading, the Amex recorded sales of 4.3 million participations based on the S&P 500, representing volume of about $135 million, spokeswoman Marilyn Imwalle said.