Glossary of Financial Terms starting with Alphabet ‘U’

Glossary of ‘Financial Terms’ starting with Alphabet ‘U’, i.e. ‘Meaning’ or ‘Definition’ of Common and Unusual terms relating to Accounting, Auditing, Company Law, GST, Income Tax, Investments, etc., along with the ‘Context’ in which they are used.

Underlying

The designated financial instrument which must be delivered in completion of an option or futures contract.

Underwriter

One who does underwriting. A financial organization that handles sales of new securities which a company or municipality wishes to sell in order to raise money. Typically the underwriters will guarantee subscription to securities say, an issue of equity from the company at a stated price, and are under an obligation to purchase securities upto the amount they have underwritten, should the public not subscribe for the issue.

Underwriting

An agreement with or without conditions to subscribe to the securities of a body corporate when the existing shareholders of such body corporate or the public do not subscribe to the securities offered to them.

Unit Holders

Investors in unit trusts / mutual funds.

Unit of trading

The minimum number of shares of a company which are accepted for normal trading on the stock exchange. All transactions are generally done in multiple of trading units. Odd lots are generally traded at a small discount.

Unmatched Transactions

A check is carried out to find out whether the purchases and sales as reported by the members match. A list of those transactions which do not match are called unmatched transactions.

Unsystematic Risk

Also called the diversifiable risk, residual risk, or company-specific risk, the risk that is unique to a company such as a strike, the outcome of unfavourable litigation, or a natural catastrophe.

Upstairs market

A network of trading desks for the major brokerage firms and institutional investors that communicate with each other by means of electronic display systems and telephones to facilitate block trades and program traders.

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