Terms Beginning With 'u'

Underlying Asset/Security

A security on which a derivative contract is based upon is known as an Underlying Security or Underlying Asset. The underlying security could be a bond, a stock, an index, a currency, a commodity, or another derivative product such as volatility index, VIX, that provides a derivative value. The value of the derivative may either be directly corelated or inversely correlated to the value of the underlying asset.

 

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