Underlying Instrument
The instrument, such as shares and commodities on which a futures or options contract is based.
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Ordinary Shares
Commodity (commodities)
Futures Contract
Option
Derivatives ...
The underlying instrument is the financial instrument upon which a derivative security's price is based.
Underlying Instrument
Definition:
A trading instrument subject to purchase upon exercise. ...
Underlying Instrument
Both the purchaser and grantor should know whether the particular option in which they contemplate trading is an option which, if exercised, ...
Underlying Instrument
A trading instrument subject to purchase upon exercise.
Underlying Security
In options, a stock subject to purchase upon exercise of the option.
Underlying Instrument
The underlying instrument of an equity option is a number of shares of a specific stock, usually 100 shares. Cash-settled index options do not relate to a particular number of shares.
Futures whose underlying instruments are based on agricultural commodities, such as grains, cattle, coffee, or butter. Agricultural futures have had a long history, with the first contracts originating in 1865 on the Chicago Board of Trade.
The price of the underlying instrument is a geometric Brownian motion, in particular with constant drift and volatility.
It is possible to short sell the underlying stock.
There are no riskless arbitrage opportunities.
Underlying asset, underlying instrument: The instrument (shares, bonds, stock index.) that can be purchased (in case of call) or sold (in case of a put) by a buyer who exercises his option.
Deep-in-the-Money: A call option which has the strike price of the option well below the current price of the underlying instrument.
Degrees of Freedom: The number of observations minus the number of parameters to be estimated.
LEAPS permit investors to express longer-term views, without buying the underlying instruments.
Backspread A delta-neutral spread composed of more long options than short options on the same underlying instrument. This position generally profits from a large movement in either direction in the underlying instrument.
The terms "spot" and "spot price" usually refer to the cash market price for the underlying instrument that is available for immediate delivery. Cash Price The price of the actual underlying commodity that a futures contracts is based upon.
In practice, the market maker price usually matches the underlying instrument as the CFD provider would otherwise be exposed to arbitrageurs, ...
First, a party can purchase a put or call Option as a tool for outright speculation, that is, buying an Option in the hope that the underlying instrument will rise or fall dramatically in price.
The underlying instruments of financial futures are stock indices, currencies, or interest rates, whereas commodity futures are tied to the movements of real goods such as raw materials or agricultural products.
It is widely accepted and known (the obvious exception being SB company glossy promotional literature) that the SB companies quote, whilst being based on the underlying instrument, ...
The main strength of this type of analysis is the flexibility with regard to the underlying instrument, regarding the markets and regarding the time frame.
That means there's a $1 change in the option price for every $1 change in the price of the underlying instrument. With a call option, an increase in the price of an underlying instrument typically results in an increase in the price of the option.
Like other MAs, the computed line indicates the prevailing trend in the underlying instrument. However, the TRIX reacts very sluggishly, and so an intersection with the center line cannot be interpreted as a trading signal.
If the Performance indicator shows 50, then the price of the underlying instrument has increased 50% since the start of the Performance indicator calculations.
If you buy a call Option you have the right, but not the obligation to buy the underlying instrument at the agreed strike price on the agreed expiry date (European Option).
An options contract conveys the right, not the obligation, to assume a position in the underlying instrument at a specific (strike) price any time before the option expires.
Delta Neutral This is an "options/options" or "options/underlying instrument" position constructed so that it is rela tively insensitive to the price movement of the underlying instruments.
A call option is in-the-money if the price of the underlying instrument is higher than the exercise/strike price. A put option is in-the-money if the price of the underlying instrument is below the exercise/strike price.
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A put option is out-of-the-money if the exercise/strike price is below the price of the underlying instrument. A call option is out-of-the money if the exercise/strike price is higher than the price of the underlying instrument. See In-the-money.
Derivatives Financial instruments whose value depends upon the characteristics and value of another underlying instrument, typically an option or futures contract. Income is provided through changes in the value of the underlying instrument(s).
(1) An option that gives the holder the right to buy the underlying instrument at a specified price during a fixed period. (2) A period of trading. (3) The right of an bond issuer to pre pay debt and demand the surrender of its bonds.
Call Dates ...
Call Warrants give their owner the right to buy an underlying instrument (e.g. a share), and which would therefore normally be used by an investor who thought the price of the underlying asset was due to rise.
Candlestick Charts ...
With spread betting, you are simply speculating on the direction of the future price movements in an underlying instrument; you specify an amount you want to bet on each point movement. Spread bets are a margined product.
(ATM): When the strike price of an option is the same as the current price of the underlying instrument.
An option is at-the-money if the strike price of the option is equal to the market price of the underlying security.
Additional Comments: ...
A position created by selling a call option, buying a put option, and buying the underlying instrument (for example, a futures contract), where the options have the same strike price and the same expiration. See also: Reverse Conversion.
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Knock-out option
An option that becomes worthless when the price of the option's underlying instrument or market reaches a previously agreed upon point.
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A B C D E F G H I J K L M N O P Q R S T U V W XYZ ...
Strangle
Buying or selling an out-of-the-money put option and call option on the same underlying instrument, with the same expiration. Profits are made only if there is a drastic change in the underlying instrument's price.
Generally, the put or call will mature well before the date of expiration when the underlying instrument undergoes a substantial change in price.
Option Class
All options of the same type - calls or puts -listed on the same underlying instrument.
Option Series
All options of the same class having the same exercise/strike price and expiration date.
Breakout
A rise in the price of an underlying instrument above its resistance level or a drop below the support level.
Finally, we compare the outcome of the method MACDR2 with two benchmarks, the risk-less Treasury bond and the underlying instrument, the NASDAQ-100 to challenge the random walk hypothesis.
Gunter Meissner, Albin Alex and Kai Nolte
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With regard to options, a position created by buying a call option, selling a put option, and selling the underlying instrument (for example, a futures contract). See also: Conversion
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Implied Volatility Options Pricing ...
This substantial costs is avoided since the CFD trader never actually purchases the underlying instrument. This explains why so many UK fund managers are using CFDs as an indispensable part of their investment strategies.
Intrinsic Value
The difference between the price of the underlying instrument and the strike price of an option.
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An over-the-counter (OTC) or exchange-traded financial contract whose value depends on the value of the underlying instrument. Some examples are futures contracts, stock options, equity indexes, and mortgage backed securities, and OTC Forex options.
The exercise price of a derivative that is closest to the market price of the underlying instrument.
Automatic Order Matching and Execution System (AMS) ...
A financial instrument or security whose characteristics and value depend upon the characteristics and value of an underlying instrument or asset, typically a commodity, bond, equity or currency.
Kuala Lumpur Options and Financial Futures Exchange (KLOFFE)
Established in 1995, the Kuala Lumpur Options and Financial Futures Exchange offers equity derivative products based on underlying instruments traded on the Kuala Lumpur Stock Exchange ...
Stochastic calculations produce two lines, %K and %D which are used to indicate overbought/oversold areas of a chart. Divergence between the stochastic lines and the price action of the underlying instrument gives a powerful trading signal.
However if the rate of the call option falls or does not rise, the call option may be worthless, involving a much greater loss than if the same money had been invested in the underlying instrument.
When the underlying instrument is an index, this usually involves multiplying the value of the index times a fixed amount.
A technical indicator that was developed by Tushar Chande in 1995 and used for identifying trends in an underlying instrument (Currency) and the likelihood that the trend will reverse. It's made up of two lines.
[WCSU] The buyer of a call option has the right to buy an underlying instrument at a predetermined price during a determined period. The seller of a call option has the obligation to sell, if the option is exercised.
 See also: Underlying, Option, Trading, Market, Options
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