Underlying security
For 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. For Depository receipts , the class, series and number of the foreign shares represented by the depository receipt. | ||||
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Underlying security definition was found in categories: Business & Finance(2)
Underlying security Definition from Business & Finance Dictionaries & Glossaries
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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. Warrants, rights, options, and convertible securities all have underlying securities. For futures options, futures are the 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. Warrants, rights, options, and convertible securities all have underlying securities. For futures options, futures are the underlying security.
| Options Trading Glossary |
Underlying stock or security
The security that would be purchased or sold if the option was exercised. Underlying securities can include stock, futures and indexes.
The security that would be purchased or sold if the option was exercised. Underlying securities can include stock, futures and indexes.