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 ?
Boucher's hypothesis implies that adding salt to airways will pull water out of cells and increase the depth of the liquid layer that underlies mucus, which would boost a patient's rearing of mucus.
In the lab, Srivastava and his colleagues are now looking for the genetic signals that regulate the formation of the heart's chambers and vessels and thus underlie the wide range of congenital heart defects.
In a separate March 10 Cell report, Keating's team showed that a different gene, this one on chromosome 3, can also underlie long QT syndrome.
The isolated cells responded with the same changes that underlie forms of both short-term and long-term memory in an animal.
That makes sense, Feigenson notes, because 300,000 years ago Mauna Kea was directly above the same hot spot that now underlies Kilauea.