Underlying
The "something" that the parties agree to exchange in a derivative 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 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.
