Underlying instrument

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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.

References in periodicals archive ?

Assistance and advisory services provided by the underlying companies for the selection of targets (implementation of their investment strategy); B.

Selection Of A Pgs For The Management Of The Future Pooled Life Insurance Fund lderdom

Your investment decisions will have a shelf life as many factors can change with the underlying companies you bought.

Six commandments in stock investing

Recently launched Pomona Investment Fund, distributed by Voya Investments Distributor, LLC, said it has purchased a USD25 million portfolio in the secondary market of diversified private equity interests across 17 underlying funds and nine general partners, with over 300 underlying companies, from a US endowment.

Pomona fund makes first investment

In our view, given that over 90% of EOS's holdings are quoted on the RTS and MICEX, combined with its shares' superior liquidity relative to the underlying companies, the discount to NAV seems unjustified.

Aton - EOS RUSSIA: An Exposure to Electricity Distribution at a 25 Discount to NAV - Mar 29, 2010

A DB plan removes the necessity of employees to understand that their pensions come from the success of their investments--the mutual funds and the underlying companies invested them.

Defined benefit plans vs. defined contribution plans

Our economy continues to boom ahead, and the value of the underlying companies should follow.

Of Competitive Environments and Selective Disclosure

It cannot be assumed that underlying companies will always pay dividends immediately before the shareholding company makes a distribution.

Draft Canadian legislation on the tax treatment of interest expense

We don't want to buy securities whose P/Es are not in line with historic norms or are too far ahead of the earnings growth rates that the underlying companies can deliver.

The Wall Street Transcript Publishes Money Manager Comments on First Data

This tranche enabled sophisticated investors who had a bullish view to participate in the upside of their selected counters, with a wide array of underlying companies with exposure to the O&G sector, said the bank.

Malaysia : MAYBANK INVESTMENT issues eight new European-style cash-settled call warrants

We don't want to buy securities whose p/e's are not in line with historic norms or are too far ahead of the earnings growth rates that the underlying companies can deliver.