Financial Derivative Terms - U
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
- Underlying
- An asset or financial instrument upon which a derivative depends. The price of the underlying determines the price of the derivative that is linked to it. As the underlying’s price fluctuates so will the value of the derivative.
- Unsystematic Risk
- Also known as specific risk, the type of risk of an asset that is unique to the asset itself and not related to other assets in the overall market. This risk can be minimized through diversification.
- Up-and-in Barrier Option
- A type of single barrier option that when the option is set, the underlying asset is below the barrier level. If the barrier is touched, the holder now owns a standard option. If over the life of the option the barrier is never touched, the option dies worthless though the holder may be entitled to a rebate.
- Up-and-out- Barrier Option
- A type of single barrier option that when the option is set, the underlying asset is below the barrier level. As long as the barrier is never touched, the holder owns a standard option. If the barrier is ever touched, the option dies worthless though the holder may be entitled to a rebate.
- Uptick
- A price increase of a transaction from the last transaction in the same security.
- US Bond Market Association Municipal Swap Index (BMA Index)
- This index is produced weekly, reflecting the average rate of issues of tax-exempt variable-rate debt, and serves as a benchmark floating rate in municipal swap transactions. The BMA index is usually 65%-70% of its taxable equivalent, the 1-month LIBOR.
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