Difference between revisions of "Underlier"
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Latest revision as of 11:32, 18 March 2020
Definition
Underlier. The financial instrument(s), index or parameter, or combination thereof, that form the basis for the Derivative Instrument
Issues and Challenges
The underlier breaks down into two separate meanings:
- The item which determines the value of the contract (the observable), and
- the item that is deliverable upon expiry or exercise of the contract (if there is one).
These are usually the same item but in some cases such as index derivatives the exercise takes a different form. A
Disclaimer
This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.