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 ?
Derivatives are financial instruments that "derive" their value from underlying assets such as stocks, bonds, mortgages, market indices or foreign currencies.
The value of the underlying swap if, for example, you wanted to unload it during the transaction, is exposed to interest rates in the market, because you can get the swap price at any point.
Although the factual finding that no unitary relationship was present in either Woolworth of ASARCO has been criticized, the Court clearly delineated the constitutional requirement in those cases (as well as in Mobil) that an underlying unitary business must be conducted by the generating and recipient corporations in the state seeking apportionment.
Today's reduced margins are resulting in underlying mortgages with rates of under 7 percent.
In addition, the majority rejected P&T's argument that the market price of publicly traded securities equaled the value of the underlying assets held by an entity.
In January of 1997, Hyde Park Gardens' underlying mortgage was purchased by The Cheshire Group, a Manhattan-based investment firm.
i) makes every reasonable effort to avoid taking or making delivery of the asset underlying the contract; or
The major pitfall in this type of transaction is that the basis of the FLP's underlying assets remains at F's original cost basis.
There are basically four ways to invest in New York Metropolitan area cooperatives: 1) Purchase performing underlying building mortgages; 2) purchase non-performing or sub-performing underlying building mortgages; 3) purchase bulk units in cooperatives (with or without unsold share status); and 4) cooperative work-out situations, also known as "White Knight" investors.
Capital expenditures for 2007 for the Underlying Properties are estimated to be $28 million.
The legal principal - which holds that a holder of a wraparound mortgage must meet its obligations to the underlying mortgagee or it loses the wraparound mortgage - has been made clear in the case of 51 Fifth Avenue v.
The discount arises because the estate cannot readily cause the sale of the assets underlying the partnership interest.