underlying commodity

Definition of "underlying commodity"
  1. The physical item or futures contract an option is based on, which must be delivered or received if the option is executed
How to use "underlying commodity" in a sentence
  1. The deal was jeopardized when the price of the underlying commodity fluctuated drastically.
  2. Because gold was the underlying commodity, they had to closely observe market trends.
  3. He decided to buy a futures contract when he noticed favorable trends in the underlying commodity.

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