Underlying security

Definition

For options, the security that is subject to purchase or sold upon exercise of an option contract. For example, IBM stock is the underlying security for IBM options. For Depository receipts, the class, series, and number of the foreign shares represented by the depository receipt.

Nearby Terms

Underlying debt Underlying futures contract Underlying security Undermargined account Underperform

Getting Started In Stocks
Investopedia
The NASDAQ Dozen
Learning Markets
The 10 Commandments Of Investing
Investopedia
The Lowdown On Penny Stocks
Investopedia
10 Things To consider Before Selecting An Online Broker
Investopedia
Start Investing With Only $1,000
Investopedia

Term of the Day

RSS

Debit spread
Applies to derivative products. Difference in the value of two options, when the value of the option bought exceeds the value of the one sold. One buys a "debit spread." Antithesis of a credit spread.

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!