Definitions for "Underlying asset"
The security, stock, commodity, index or future upon which an options or futures contract is based.
The value of a derivative instrument depends on the performance of the underlying asset or security. These may be commodity derivatives such as gold, sugar, jute, pepper, iced broilers or coffee. They could also be financial in nature such as stocks, bonds, gilts, currencies and money market instruments.
the asset on which the price of a derivative depends.... more on: Underlying asset