Underlying Security

Underlying Security - A security which is subject to delivery upon exercise of an option contract. Undervalued - Price is below its perceived value.

Underlying Security (business term) Qualified Stock Option (in accounting) Compensatory Stock Options (business term) ...

Underlying Security The security subject to being purchased or sold upon exercise of the option contract.

Underlying Security In options, the security that needs to be delivered when call options or put options are exercised.

Underlying Security In options, a stock subject to purchase upon exercise of the option. Uniform Gifts to Minors Acts A law that allows minors to own property without the use of a trust.

UNDERLYING SECURITY Options: the security subject to being purchased or sold upon exercise of an option contract. For example, IBM stock is the underlying security to IBM options.

Underlying Security: The security upon which a derivative (option, index, futures contract) or other security is based. Eg, an ASA option is based upon the price of ASA stock. The S&P 500 futures index is based upon the S&P 500 stock index.

Underlying Security - The security which one has the right to buy or sell via the terms of a listed option contract.

Underlying Security The security that must be delivered when another security is exercised. For example, if a call option is exercised, then the underlying stock is delivered to the call owner.

Underlying Security - The security on which options are being bought or sold.

The underlying security for which futures are traded. What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures See Details & ...

class of options Option contracts of a single type (call or put) and style (American, European or capped) that cover the same underlying security. classified loan A loan that is criticized by bank examiners as being substandard after being approved.

result occurring, but instead, the two results are indirectly related because they are subject to influences from a c Derivatives: Instruments, such as options and futures contracts, which derive their value from the value of an underlying security, ...

The diagram is plot of expected profit or loss against the price of the underlying security. PCX NYSE Arca Physical delivery option An option whose underlying entity is a physical good or commodity, like a common stock or a foreign currency.

[NYMEX] The receipt of an exercise notice by an options writer that requires the writer to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.

Embedded optionAn option that is part of the structure of a bond, as opposed to a bare option, which trades separately from any underlying security. Emerging marketsThe financial markets of developing economies.

Spread: A spread is when an investor purchases an option and sells an option with different terms on the same underlying security. For example, a spread may be established by buying an XYZ March 35 call and selling a XYZ March 40 call.

Naked Put: The writer of a put option contract who is not short the underlying security. Narrow Range Day: A trading day with a smaller price range relative to the previous day's price range.

This line can then be compared with the price chart of the underlying security to look for divergences or confirmation. Open Interest The number of options or futures contracts that are still unliquidated at the end of a trading day.

The strike price or exercise price for an option contract is the price at which the underlying security can be bought or sold. Every option contract has an expiration date, on which the option is no longer valid and ceases to exist.

A technical indicator developed by Tushar Chande used for identifying definable trends in an underlying security.

The success of the strategy has a great deal to do with the underlying security. If that security is considered to be strong and possess an excellent chance for growth, then the class of options can make it possible to capitalize on this situation.

In a strong uptrend, an oscillator can reach an overbought condition and remain so as the underlying security continues to advance. A negative divergence may form, but a bearish signal against the uptrend should be considered suspect.

Single-stock futures are exchange-traded futures contracts based on an individual underlying security rather than a stock index.

An associated term is Delta (the relative amount an option's price will change if the underlying security's price changes, hardly ever 1 for 1).

Options traders rarely exercise the option and buy (or sell) the underlying security. Instead, they buy back the option (if they originally wrote a put) or sell the option (if the originally bought a call). This saves commissions and all that.

An option in which the underlying security is the common stock of a corporation, giving the holder the right to buy or sell its stock at a specified price by a specific date.

A written option is considered to be covered if the writer also has an opposing market position on a share-for-share basis in the underlying security.

Sometimes called an uncovered option, a naked option is one whose seller does not maintain an equivalent position in the underlying security. For example, the owner of a call has the option to buy the underlying stock from the writer of the call.

Convertible Auction Rate Preferred Stock - a convertible auction rate preferred stock is a certain type of an auction related preferred stock that can be converted into shares of the underlying security an underlying security is a commodity or ...

A call option is in-the-money if the strike price is less than the market price of the underlying security. A put option is in-the-money if the strike price is greater than the market price of the underlying security.

A security that represents the right, but not the obligation, to buy or sell a specified amount of an underlying security (stock, bond, futures contract, etc.) at a specified price within a specified time.

Gamma shows the anticipated change in Delta, given a one point increase in the underlying security. Thus, it shows how responsive Delta is to a change in the underlying security's price.

A form of option writing or selling in which the seller owns neither the underlying security nor a different option on that same security with the same (or later) expiration date and higher striking price.

A warrant which gives the warrant holder the right, but not the obligation, to buy the underlying security at a predetermined price (the exercise or strike price), ...

A riskless arbitrage in which a discount option is purchased and an opposite position is taken in the underlying security.

Delta: The amount by which an option's price will change for a one-point change in the price of the underlying security. Call options have positive deltas, while put options have negative deltas.

A short call option position - the writer does not own shares of underlying security represented by his option contracts. A.k.a a "naked" asset, it is much riskier for the writer than a covered call, where the writer owns the underlying stock.

A bar chart is the graphical representation of an underlying security's price action. The bar contains the security's open, high and low. A bar chart can be plotted on any time-frame (i.e. tick, minute, hourly, daily, weekly).

The PVT is calculated by multiplying the day's volume by the percentage change of the underlying security and adding this value to a cumulative total. For example, if the security closed up 0.5% and volume was 10,000 shares, we would add 50 (i.e., 0.

DERIVATIVE or DERIVATIZED SECURITY - A product, whose value is derived from an underlying security, structured to deliver varying benefits to different market segments and participants.

Derivative - A security derived from another and whose value is dependent the underlying security from which it is derived. Examples of derivatives are future contracts, forward contracts and options.

DELTA " A statistical measure of the price movement of an option contract in relation to the price movement of the underlying security.

The right to buy 100 shares of the underlying security at a fixed price before a specified expiration date. Call buyers hope the price of the stock will rise. Call sellers hope the price will stay the same or go down.

An interesting phenomenon of the Williams Percent Range indicator is its uncanny ability to anticipate a reversal in the underlying security's price.

Options: Convey the right, but not the obligation, to buy or sell an underlying security or commodity during a specific time for a specific price.

Derivative Instrument: Securities that derive their value from the performance of an underlying security (e.g. futures and options).

As a speculator, if you buy a call option you think the price of the underlying security is going to increase. If you sell a call option, you think that either the price will not increase or you think the price will decrease.

Intrinsic value: The intrinsic value of an option is the difference between the actual price of the underlying security and the strike price of the option.

Call Option : An option where the buyer gets the right to buy the underlying security at a specified future date. Carry Forward : Settlement where positions are carried forward from one settlement to another settlement.

An interesting phenomena of the %R indicator is its uncanny ability to anticipate a reversal in the underlying security's price. The indicator almost always forms a peak and turns down a few days before the security's price peaks and turns down.

Looking for divergences : A popular method of analyzing the CCI is to look for divergences in which the underlying security is making new highs while the CCI is failing to surpass its previous highs.

A call option whose exercise (strike) price is above the current market price of the underlying security or futures contract.

A financial contract that derives its value from an underlying security, liability or index. Derivatives come in many varieties, including forwards, futures, options, warrants and swaps. Also known as Synthetic. Development Capital ...

Out-of-the-Money A call option whose exercise price is above the current market price of the underlying security or futures contract.

Derivatives: options and other instrument whose value depends on an underlying security. For instance, the value of a call option on Cisco Systems (derivative) fluctuates with the price of Cisco System's stock.

Class of Options Option contracts of the same type (call or put), style and underlying security. Clearinghouse An institution established separately from the exchanges to ensure timely payment and delivery of securities.

A market instrument that is derived from an underlying security or that is created from other securities. Derivatives include swaps, futures, and options. Discount Bond ...

- Equity warrants can be put warrants or call warrants. The underlying security can be bought with call warrants, while the put warrants gives one the right to sell.

Naked writer A seller of an option contract who does not own a position in the underlying security. Net change The difference between the previous day's closing price and the last traded price.

See also: Underlying, Security, Price, Option, Stock