underlying security
[/ˌʌndərˈlaɪɪŋ sɪˈkjʊrɪti/]
nounfemininepl: underlying securities / títulos subjacentes
título subjacente
1. A financial instrument (stock, bond, commodity, or index) that forms the basis of a derivative contract, such as an option, future, or warrant
The underlying security of this call option is Apple Inc. stock.
O título subjacente desta opção de compra é a ação da Apple Inc.
2. The asset to which the value of a derivative is tied, determining the derivative's payoff
The trader analyzed the underlying security before purchasing the derivative.
O operador analisou o título subjacente antes de comprar o derivativo.
This is a technical financial term widely used in both Brazilian and American investment markets. In Brazil, 'título subjacente' is the standard terminology used by BOVESPA (B3 - Brasil, Bolsa, Balcão) and financial institutions. The concept is fundamental to understanding derivatives trading, which has grown significantly in Brazil's financial sector. Understanding underlying securities is essential for investors dealing with options, futures, and other derivative products in both markets.
Related Idioms & Phrases
follow the underlying security
price movement of the underlying security
the underlying security's performance
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