Underlying Commodity
The commodity or futures contract on which a commodity option is based, and which must be accepted or delivered if the option is exercised. Also, the cash commodity underlying a futures contract. |
Similar financial terms
Underlying instrumentAn underlying instrument is the financial instrument upon which the price of derivative is derived from.
Underlying security
For options it is the security subject to being purchased or sold upon exercise of an option contract. For example, Deutsche Bank stock is the underlying security to Deutsche Bank options.
For depository receipts it is the class, series and number of the foreign shares represented by the depository receipt.
Underlying
The "something" that the parties agree to exchange in a derivative contract.
Cash commodity
The actual physical commodity, as distinguished from a futures contract.
The Commodity Futures Trading Commission (CFTC)
The Commodity Futures Trading Commission is the federal agency created by Congress to regulate futures trading. The Commodity Exchange Act of 1974 became effective April 21, 1975. Previously, futures trading had been regulated by the Commodity Exchange Authority of the USDA.
Commodity
A commodity is food, metal, or another physical substance that investors buy or sell, usually via futures contracts.
Commodity Pool
An investment trust, syndicate or similar form of enterprise operated for the purpose of trading commodity futures or option contracts.
Commodity Price Index
Index or average, which may be weighted, of selected commodity prices, intended to be representative of the markets in general or a specific subset of commodities (for example, grains or livestock).
