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Username: LuckyMan

Rating:
Guru Stars

Asked to: Heng Kim

Date Created: 22 Jun 2016
Category 46
Tag Financial
Question What is an 'Underlying Asset'?
Advice from Guru
Hello LuckyMan,

An underlying asset is a term used in derivatives trading, such as with options. A derivative is a financial instrument with a price that is based on (that is, derived from) a different asset. The underlying asset is the financial instrument (such as stock, futures, a commodity, a currency or an index) on which a derivative's price is based.

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