Glossary U

Trader slang for when the market is unchanged.

Another term for naked call or put.

The stock or other security that determines the value of a derivative security and that (with the exception of cash-settled options) would be purchased or sold if an option on that underlying stock or security was exercised. Examples of underlying securities are stocks, bonds, futures and indices.

The company-specific microeconomic factors that affect an individual stock. Theoretically, it's the risk in a portfolio that can be reduced through diversification. Compare to systematic risk.

A term used to describe a trade made at a price higher than the preceding trade.

SEC regulation governing the market price at which a short sale may be made. Meaning, if a stock on a given day has already dropped by more than 10% since the previous day's close it must trade higher before it can be shorted again. This rule does not apply to exchange-traded funds (ETFs).

Successive upward price movements in a security over time.