Trading Terms Starting With U

  • Uncovered call writing

    writing an equity call contract that is not offset by an equivalent number of long underlying shares (one call for each 100 shares), or by a long call on the same underlying with an equal or lower strike price.
  • Uncovered put writing

    writing an equity put contract that is not offset by an equivalent short position in the underlying stock (one put for each 100 shares), or by a long put on the same underlying with an equal or greater strike price.
  • Underfunded pension plan

    a pension plan that has liabilities exceeding assets. This could be the result of a company's inability to contribute funds, projected interest income falling short because of declining interest rates, or a plan whose portfolio of investments is losing money.
  • Underlying

    the security or value on which a specific option's value is based. The underlying may be shares of a stock, shares of an ETF, or the value of an index.
  • Underperformer

    see Market underperformer.
  • Undervalued

    1. a stock that is seen as underpriced through a process of fundamental or technical analysis.
    2. a stock or option that is underpriced according to a particular theoretical valuation model.
    3. a stock that is trading for less than book value because of investor disinterest or disfavor.
  • Underwrite / underwriter

    to purchase an entire offering of new securities from a company and then resell it to investors. Typically this is done by a number of underwriters (commercial and/or investment bankers) who guarantee a price for the securities to the company who issued them.
  • Unit investment trust (UIT)

    an investment company registered with the SEC who assembles a portfolio of investments such as bonds, income producing stocks or all component stocks of a particular index. Once assembled, the portfolio's composition is fixed, e.g., not actively managed, and the UIT sells shares to investors at a premium to their net asset value in the form of redeemable trust certificates. Thereafter, these certificates trade in a secondary market like shares of stock.
  • Unlimited risk

    the potential loss from an investment that has no theoretical bounds. A short stock position has unlimited risk on the upside because in theory a stock price could increase to infinity. An uncovered short call position also has unlimited risk because losses will continue to mount as the underlying stock increases, again with no bounds.
  • Unrealized gain / unrealized profit

    for a given securities position, a paper profit that has not become real since a closing transaction has not occurred.
  • Unrealized loss

    for a given securities position, a paper loss that has not become real since a closing transaction has not occurred.
  • Upgrade

    1. improvement in a company's credit rating for bond issues, as in raising an AA rating to AAA.
    2. improvement in a research analyst's rating (recommendation) of a company's stock, as in raising a recommendation from "hold" to "strong buy."
  • Uptick

    occurs when a security trades at a price higher than the preceding trade. Opposite of Downtick. Also termed Plus tick.
  • Uptrend

    upward movement in the price of a security or broader market. Opposite of Downtrend.