Investor Glossary-underlying securityInvestor Glossary-underlying securityInvestor Glossary-underlying securityInvestor Glossary-underlying securityInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Underlying Security

The HTML to link to this page
 

Also called an underlier, an underlying security is the security upon which certain others (a call or put option, a convertible security, a stock option, a warrant, or stock right) are based. The underlying security must be delivered once the option, convertible, etc. is exercised. Futures and index options are exceptions to this rule, as they do not have an underlying security behind them. Instead, they are settled in cash. For convertibles, the underlying security is in the form of common stock. When a bond or a preferred stock is converted to common stock, the underlying security is delivered to the new owner. Stock options, warrants, and stock rights also have an underlying security in the form of common stock.



Rate this underlying security definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: FICO score, Key Rate Duration, implied volatility, 144a, required rate of return, class C shares, open position, Zero Cost Collar, ex-dividend date, retained earnings, LIBOR, stock split, EBITDA, ex-dividend, limit order, balance sheet, FTSE, deferred tax, liquidity ratio, 1031 exchange, per diem, deferred revenue, reverse mortgage, cancelled check, stock market close, margin rate, current ratio, diluted share, dividends payable, real GDP, in escrow, risk management, APR, irrevocable trust, command economy, quality assurance, wholly-owned subsidiary, 1035 exchange, option premium, VIX, covered put, labor relations, average price per share, inflation, phantom income, minority interest, 401a, debt service coverage, annual return


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use