Underlying: The designated financial instrument which must be delivered in completion of an option or futures contract.

Underwriter: One who does underwriting. A financial organization that handles sales of new securities which a company or municipality wishes to sell in order to raise money. Typically the underwriters will guarantee subscription to securities say, an issue of equity from the company at a stated price, and are under an obligation to purchase securities up to the amount they have underwritten, should the public not subscribe for the issue.

Underwriting: An agreement with or without conditions to subscribe to the securities of a body corporate when the existing shareholders of such body corporate or the public do not subscribe to the securities offered to them.

Unit Holders: Investors in unit trusts / mutual funds.

Unit of Trading: The minimum number of shares of a company that are accepted for normal trading on the stock exchange. All transactions are generally done in multiple trading units. Odd lots are generally traded at a small discount.

Unmatched Transactions: A check is carried out to find out whether the purchases and sales as reported by the members match. A list of those transactions which do not match is called unmatched transactions.

Universe: Term sometimes used to describe the total number of operators or competitors in a particular field or the number of available stocks from which a portfolio is selected. Investment manager performance surveys are also referred to in this way

Unsystematic Risk: Also called the diversifiable risk, residual risk, or company-specific risk, the risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe.

Upstairs Market: A network of trading desks for the major brokerage firms and institutional investors that communicate with each other by means of electronic display systems and telephones to facilitate block trades and program traders.

Uptrend: Situation in which the price of a security or the overall market is rising.

Under Valued Shares: Shares selling below their book value or the price earning ratio that analysts believe they deserve. There may be many reasons for this, the industry is out of favor, or the company has current labor trouble, or it is not well known enough or this is quite common, and the company has not yet caught the investor's fancy. Companies with undervalued shares are often targets of the takeover as their shares can be acquired cheaply.

Unlisted Share: A share that is not registered with any stock exchange and therefore does not feature on any stock exchange list. Owners of such shares are deprived of the protection that the holders of a listed share enjoy from the stock exchange. These shares are also very difficult to sell and carry a large risk. Usually, the more exchanges at which a share is listed, the greater the liquidity.

Unloading: Selling shares off when prices are falling to avoid further loss. Bulls, when they get tired of waiting for the price to rise, tend to unload when the market is falling, causing prices to fall further.

Unrealized Profit or Loss: Profit or loss on one’s holding of shares which is merely the result of a book exercise, because the shares have not been sold. Also called paper profit or loss.

Unsecured Debt: Debt obligation with no collateral, and backed only by the debtor’s creditworthiness.

Unwind: Reversal of an investment decision. For instance, an investor who has bought a share can unwind the position by selling the share.

Stock Market Reference (A-Z)


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