Underlying


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Underlying

What supports the security or instrument that parties agree to exchange in a derivative contract.

Underlying Instrument

A security, commodity, or other asset described in a derivative contact. For example, in an option contract giving the holder the right to buy so many shares of AT&T, the underlying instrument is stock in AT&T. Likewise, in a futures contract on so many barrels of refined oil, the underlying instrument is refined oil.
References in periodicals archive ?
Takeda started FY2015 on a positive trend, with underlying revenue growing 6.
However, in applying the second prong, it rejected the taxpayer's use of the patent law classification system in grouping the exchanged patents into one of four broad groups (machine, process, manufacture and composition of matter) and instead applied the six-digit North American Industry Classification System (NAICS) product codes (applicable in determining like-class for depreciable tangible personal property) in determining whether the underlying properties were like-kind.
This will afford the student a tactile experience of the underlying counterpoint.
Thus, both the nature or character of the rights involved and the nature or character of the underlying property are taken into account.
With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured.
Many scholars, however, argue that administrators need an understanding of the theoretical constructs underlying the field of education and leadership.
The underlying etiology of temporal muscle hypertrophy has been attributed to chronic bruxism, masseteric hyperfunction, and parafunctional jaw habits.
The Tax Court rejected the expert valuations and formulated its own method to value the stock: It took the underlying value of the timber property the corporation owned and reduced it by the net present value of the capital gains tax liability the company would incur as the timber was cut.
However, inadequate pricing and excessive leverage often prevent companies from achieving superior operating results in umbrella lines compared with the underlying lines, said Dan Newsome, a colleague of Easterday's at American Re.
In almost every case, the reason for the high monthly fees is excessive mortgage financing on the underlying property.
The INDEPTH scientists surmise that the liquid is partially molten rock in a layer underlying much of the Tibetan plateau.
As the underlying stock increases in value, the convertible appreciates in value as well, and it can increase far beyond its bond value without equity conversion.