Quotes of the day:
We are totally opposed to abortion under any circumstances. We are also opposed to abortifacient drugs and chemicals like the Pill and the IUD, and we are also opposed to all forms of birth control with the exception of natural family planning.
Underlying, when referred to in reference to equity trading, is the common stock that must be delivered when a warrant is exercised, or when a convertible bond or convertible preferred share is converted to common stock. The price of the underlying is the main factor that determines the prices of derivative securities, warrants, and convertibles. Therefore, a change in the price of the underlying results in a simultaneous change in the price of the derivative asset linked to it.