Underlying security

Underlying security

For options, the security that is subject to purchase or sold upon exercise of an option contract. For example, IBM stock is the underlying security for IBM options. For Depository receipts, the class, series, and number of the foreign shares represented by the depository receipt.

Underlying Security

In a derivative or warrant, a security that gives value to the derivative or warrant. For example, in an option giving one the right to buy stock in Johnson and Johnson, the underlying security is the stock in Johnson and Johnson. An underlying security may be a stock or a bond.
References in periodicals archive ?
Turbo warrants offer investors leverage which reflects the price movements in the underlying security largely independent of the influence of volatility.
The price of a call option rises with the rise in the price of its underlying security.
Price or value of underlying security: The price of a call option increases with the rise in the price of its underlying security.
The ED proposes that, in valuing financial instruments, practitioners consider the effects of contract interest rate differences from current replacement rates and contractual cash flow versus the redemption value of the underlying security.
For the TOBs whose long-term rating is based on credit enhancement from LBHI, the long-term rating will be revised to either the long-term rating of the underlying security within the TOB trust, if rated by Fitch, or withdrawn in those cases where Fitch does not rate the underlying security.
The Trust will deliver all underlying securities owned by the Trust to the underlying security issuer for redemption in connection with the tender offer by the underlying security issuer dated January 31, 2008 (the "Tender Offer") and the Trust will terminate.
The Trust will deliver to the underlying security issuer all underlying securities selected for redemption in connection with the tender offer by the underlying security issuer dated January 31, 2008 (the "Tender Offer").
A call option gives the purchaser the right to buy, and the writer the obligation to sell, the underlying security at the agreed-upon exercise (or "strike") price during the option period.
The Frontline interface is a secure Web portal for the underlying security information management platform known as Network Security Awareness System(TM) (NSAS)(TM).
BARCELONA, Spain -- Featuring an outstanding level of security, high performance and tight integration with the underlying security sub-system, Windows Media Digital Rights Management 10 further extends Discretix's DRM client offering
The resulting DRM platform represents a unique combination of flexibility with robust security, offering the ability to support multiple DRM schemes, leveraging TI's underlying security sub-system.
Capital Funding IV also includes an optimal principal distribution feature that is triggered by the default or deferral of an underlying security.