Common use of Underlying Asset Clause in Contracts

Underlying Asset. An Underlying Asset is a term used in derivatives trading. A derivative is a financial instrument with a price that is based on (that is, derived from) a different Asset. The Underlying Asset is the financial instrument (such as stock, futures, a commodity, a currency or an index) on which a derivative's price is based. Stock dividend A stock dividend is a dividend payment made in the form of additional shares rather than a cash payout. Stock split Stock split is a decision by a company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. Reverse stock split Reverse stock split is usually used by companies with low share prices that would like to increase these prices to either gain more respectability in the market or to prevent the company from being delisted or taken over by another company. Schedule 2: General Risk Disclosure Notice For Complex Products (Forex and CFD Products)