Top definition
(FINANCE) a stock whose price movements determine the value of a financial derivative. For example, when a hedge fund manager writes a call option for Citigroup (NYSE:C) at 4.25/share, C is the underlying stock.

"Underlying" can be used to refer to other things besides stocks; for example, commodities, currencies, or bonds.
A put option rises when the spot price of its underlying stock declines.
by Abu Yahya April 05, 2010
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