What Does Underlying Mean In Accounting?

What is an underlying problem?

1 adj The underlying features of an object, event, or situation are not obvious, and it may be difficult to discover or reveal them.

To stop a problem you have to understand its underlying causes…, I think that the underlying problem is education, unemployment and bad housing..

What is an underlying asset with example?

Definition: An underlying asset is the security on which a derivative contract is based upon. … An underlying asset can be a stock, commodity, index, currency or even another derivative (E.g. volatility index, VIX) product.

How do you use underlying?

Underlying sentence examplesThe fossils are few, and in some cases probably derived from the underlying formations. … Tests gave no indication of an underlying cause. … The fact that an unprecedented number of earth’s inhabitants today live in poverty is an indictment of governments, not a reflection of some underlying natural limit.More items…

What do you mean by underlying?

The obvious meaning of underlying refers to something beneath something else. But the word carries a more subtle meaning, that of something hidden but important, something that shapes the meaning or effect of something else, without being explicit itself.

What does buying the underlying asset mean?

Underlying Asset Definition. Derivatives are contracts, which convey the right/obligation to buy or sell a specified asset at a specified price at a specified future date. An underlying asset (or also called Commodity) of the derivative contract is the one that is to be bought or sold on a future date.

What is the meaning of underlying causes?

lying or situated beneath, as a substratum. fundamental; basic: the underlying cause of their discontent.

What is another word for underlying?

In this page you can discover 37 synonyms, antonyms, idiomatic expressions, and related words for underlying, like: latent, ultimate, cardinal, fundamental, basic, subjacent, substantive, substratal, substrative, underneath and vital.

What is an underlying price?

Underlying Price The spot price of the underlying asset of a derivative. For example, suppose one owns a call option to buy so many shares of Marinelli Enterprises. If Marinelli Enterprises is currently trading at $15 per share, the underlying price is $15.

What is an underlying reason?

1 adj The underlying features of an object, event, or situation are not obvious, and it may be difficult to discover or reveal them. To stop a problem you have to understand its underlying causes…, I think that the underlying problem is education, unemployment and bad housing.

What do you call a hidden meaning?

Allegory. 1. a poem, play, picture, etc, in which the apparent meaning of the characters and events is used to symbolize a deeper moral or spiritual meaning 2. the technique or genre that this represents 3. use of such symbolism to illustrate truth or a moral 4.

What is an underlying company?

: a company that is part of a larger consolidated organization and is kept in existence only because of nontransferable rights or franchises that it possesses.

What is underlying in finance?

What Does Underlying Mean? Underlying, when referred to in reference to equity trading, is the common stock that must be delivered when a warrant is exercised, or when a convertible bond or convertible preferred share is converted to common stock.

What does underlying mean in options?

An underlying option security is a stock, index, bond, currency, or commodity on which an option’s value is based. It is the primary component of how the option gets its value. … They derive their value from the performance or price action of an underlying security.

What the word for a hidden meaning?

abstruse, clandestine, close, concealed, covered, covert, cryptic, dark, hermetic, hermetical, latent, masked, mysterious, mystic, mystical, obscure, occult, recondite, secret, shrouded, ulterior, under wraps, unrevealed, unseen, veiled. hide, hoiden, hinder, hidebound.

What will happen when the price of underlying assets increases?

When price of underlying asset increases then good option is buy call option. Buying a call option entitles the buyer of the option the right to purchase the underlying futures contract at the strike price any time before the contract expires.