In finance, the underlying of a derivative is an asset, basket of assets, index, or even another derivative, such that the cash flows of the (former) derivative depend on the value of this underlying. Derivatives are Financial instruments whose values depend on the value of other underlying financial instruments In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash. A basket is an economic term for a group of several securities created for the purpose of simultaneous buying or selling This article is about index in an economics and finance sense There must be an independent way to observe this value to avoid conflicts of interest. A conflict of interest is a situation in which someone in a position of trust such as a Lawyer, Insurance adjuster, a Politician, executive or director

For example, in a stock option to buy 100 shares of Nokia at EUR 50 in September 2006, the underlying is a Nokia share. Options are financial instruments that convey the right but not the obligation to engage in a future transaction on some Underlying security, or in a Futures Nokia Corporation (pronunciation /'nɔkiɑ/),,) is a Finnish multinational Communications Corporation, headquartered In a futures contract to buy EUR 10 million 10 year German Government Bonds, the underlying are the German Government bonds. In Finance, a futures contract is a standardized Contract, traded on a Futures exchange, to buy or sell a certain Underlying instrument Other examples are stock market indexes such as the Dow Jones Industrial Average and Nikkei 225. A stock market index is a method of measuring a section of the Stock market. The Dow Jones Industrial Average ( also called the DJIA, Dow 30, INDP, or informally the Dow Jones or The Dow) is one of several is a Stock market index for the Tokyo Stock Exchange (TSE The Nikkei average is the most watched index of Asian stocks

Fixed-income derivatives are an example of derivatives whose underlying is also a derivative. For example, Euro-Bund options (OGBL) are traded on Eurex and their underlying is the Euro-Bund futures contract (FGBL). Eurex is a major futures and options exchange for European Benchmark Derivatives featuring open and low-cost electronic access globally