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


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
©2004-2015 Investor Glossary - All rights reserved - Terms of Use