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Hi Sir
can to u explain to me what is underlying? eg like underlying share price? then for futures underlying market is the bond market? When do we use the word underlying? ThanksIn general the word underlying means fundamental or basic, but in respect of the sort of examples you are giving it means the value of what the price depends on.
However, when it is used for (for example) convertible bonds the underlying share price is the value of the shares that the bonds can be converted to.
In the case of (for example) an option on shares, it is the value of the shares that would have to be delivered if the option was exercised.
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