Underlying futures contract

Underlying futures contract

A futures contract that supports an option on that future, which is executed if the option is exercised .

Underlying Futures Contract

In an option on a futures contract, the futures contract. The underlying futures contract supports the option; that is, if the option is exercised, the futures contract is executed. For example, an investor may buy a call giving him/her the right to buy a pork belly if the option is exercised. In this case, the pork belly is the underlying futures contract.
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The floor-based S&P 500 futures market, which continues to provide an important venue for trading the underlying futures contract for the open outcry S&P 500 options on futures contract, will remain open on CME Group's Chicago trading floor.
A sampling of terms defined includes: active premium, aggregation, angel financing, asset allocation, backwardation, benchmark, bridge loan, capital structure arbitrage, coefficient of determination, commodity option, convertible arbitrage, deferred futures, discretionary trading, distressed debt, enumerated agricultural commodities, extrinsic value, follow-on funding, hedge ratio, interdelivery spread, long short equity, modified value-at-risk, offshore fund, piggyback registration, social entrepreneurship, systematic trading, tracking error, underlying futures contract, venture capital method, and weather premium.
A $150 call option gives the buyer the right but not the obligation to buy the underlying futures contract at $150 a barrel.
Options require less initial cash outlay than buying the underlying futures contract would, but they can be much more volatile.
Also traded at the exchange are options that give the right, but not the obligation, to buy or sell an underlying futures contract.
Assuming that all options are carried to expiration (no early exercise), a trader who buys the call and sells the put can always expect to end up with a long position in the underlying futures contract at expiration.
Calendar swaps, which are based on the average daily settlement price for the corresponding underlying futures contract during the final month of clearing the swap, offer another way to manage price volatility in corn, wheat and soybean markets.
All the underlying Indices are rolling Indices, each of which rolls on a daily basis according to a pre-determined schedule that has the effect of keeping constant the weighted average maturity of the underlying futures contracts.
Teucrium designs investment vehicles that include transparency via the intraday indicative value (IIV), a publicly published valuation of the fund's holdings provided by the NYSE, updated every 15 seconds as the underlying futures contracts trade throughout the day.
The objective of each index in the series is to provide investors with exposure to the price difference between Sub-Indices, and in turn, the underlying futures contracts.
Adjusted Margin is a financial measure intended to approximate the margin results that would have been reported in a particular period had the Company's underlying futures contracts related to its fixed price and price cap contracts qualified for hedge accounting under SFAS No.
The European style options contracts will expire three business days prior to the expiration of the underlying futures contracts.