The buyers of options who do nothing will suffer a loss equal to the current value of the underlying asset.
- Underlying is the financial asset on which the price of the derivative is based.
- Options are an example of derivatives. A derivative is a financial instrument whose price is based on another asset.
- Underlying assets can be used to identify the items in the arrangement that gives value to the contract.
- The underlying support is the security contained in the contract that the parties agree to exchange as part of the derivative contract.
- The underlying asset represents the asset from which the derivative derives its value.
- Knowing the value of the underlying asset helps traders determine the appropriate action (buy, sell, or hold) in derivatives
To learn more about the underlying asset refer to:
https://brainly.com/question/28212271
#SPJ4
