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Underlying Instrument
(redirected from Underlying Company)

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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.

Underlying instrument. An underlying instrument is a security, such as a stock, a commodity, or other type of financial product, such as a stock index, whose value determines the value of a derivative investment or product.

For example, if you own a stock option, the stock you have the right to buy or sell according to the terms of that option is the option's underlying instrument.

Underlying instruments may also be called underlying products, underlying interest, or sometimes the underlying investment.



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Savage with the ability to exercise his expiring options and sell the underlying Company common stock in an orderly manner and avoid concerns about the timing of the transactions.
Companies would also be forced to recognise the volatility of asset returns in their profit and loss, which could mask the genuine profitability of the underlying company.
The answer was to spin off their R&D activities into partnerships in which limited partners put up the money for the underlying company to continue developing the technology.
 
 
 
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