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Underlying Futures Contract

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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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A $150 call option gives the buyer the right but not the obligation to buy the underlying futures contract at $150 a barrel.
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.
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.
 
 
 
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