If you have a futures contract for buying ten thousand pounds of coffee in july 2001, coffee is the underlying. If you have an option to purchase 500 shares of CSCO at $30 per share, CSCO shares are the underlying.
Un`der*ly"ing (?), a.
Lying under or beneath; hence, fundamental; as, the underlying strata of a locality; underlying principles.
© Webster 1913.
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