Trading Glossary

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Underlying

The thing that the parties agree to exchange in a derivative contract.

Undiversifiable risk

Related: Systematic risk

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 unfavorable litigation, or a natural catastrophe. Related: Systematic risk

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 trades.

Uptick trade

Related: Tick-test rules