The commodity/asset/financial instrument on which a derivative is based For example, in the case of an option, the product which the buyer/holder has the right to buy/sell
You describe something as underlying when it is below the surface of something else. hills with the hard underlying rock poking through the turf see also underlie. underlying cause/principle/problem etc the cause, idea etc that is the most important, although it is not easily noticed
The amount of insurance or reinsurance on a risk (or occurrence) which applies to a loss before the next higher excess layer of insurance or reinsurance attaches
in the nature of something though not readily apparent; "shortcomings inherent in our approach"; "an underlying meaning"
being or involving basic facts or principles; "the fundamental laws of the universe"; "a fundamental incompatibility between them"; "these rudimentary truths"; "underlying principles"
The security that one has the right to buy or sell according to the terms of an option contract
What supports the security or instrument that parties agree to exchange in a derivative contract
The commodity, instrument, or futures contract on which a futures option is based, and which must be accepted or delivered if the option is exercised Also, the cash commodity or financial instrument underlying a futures contract
The actual asset that the long receives at contract delivery Futures are priced from the underlying "cash" instrument Back to Top