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Underlying Security
The security on which options are being bought or sold.

Underwriter
The organization that acts as the distributor of new shares to broker/dealers and investors. In a municipal underwriting, a brokerage firm or bank that acts as a conduit by taking the new issue from the municipality and reselling it. In a corporate offering, the underwriter must be a brokerage firm.

Underwriting
The process by which investment bankers bring new issues to the market.

Underwriting Manager (1)
In a negotiated underwriting, the investment banker whose client is the corporation wanting to bring out a new issue. (2) In a competitive underwriting, the lead firm in a group that is competing with other group(s) for a new issue.

Unified Credit
A once-in-a-lifetime credit that may be applied against an individual's federal gift or estate taxes. The current credit is $192,800, which is equivalent to exempting $600,000 from federal gift or estate taxes.

Uniform Gift to Minors Accounts (UGMA)
A method of securities ownership whereby parents or other relatives may contribute cash or securities to children. Portions of returns generated by the securities are taxed at the children's tax bracket instead of parents' presumably higher bracket.

Uniform Practice Code
Part of the NASD rules that govern the dealing of firms with each other.

Unit
At issuance, a "package" of securities, such as a bond and warrant, which become separable at a later date.

Unit Investment Trust See Unit Trust
Unit Trust An investment similar to a mutual fund (that is, the trust receives money from investors and uses it to purchase a portfolio of securities) that has a specific date on which the holdings will be sold and all the earnings and gains returned to investors. Commonly, the portfolio of securities is comprised of bonds and is left unchanged after it is originally selected.

Universal Life Insurance
A type of permanent life insurance that permits the owner to vary the amount of protection and premiums to reflect changing needs. Earnings on the cash value accumulate tax-deferred.

Unlisted Securities Market (USM)
The Exchange's market for medium-sized companies which do not qualify for, or do not wish to have a full listing.

Unlisted Security (1)
A security which has not been admitted to the Stock Exchange's Daily Official List. Usually the issuer will be an unlisted company, but not always; it is not uncommon for a company to apply for its Ordinary Shares to be listed but not its loan stocks, or vice versa. (2) A security traded on the USM.

Unrealized Gain or Loss
Increases or decreases in the prices of securities held by the fund. Unscheduled repayment of principal : can shorten the maturity of the bonds. (See "Prepayment Risk.")

Unwind
An advanced option order that is used with the intention of closing an existing Buy/Write or Sell/Write position.

Uptick
A listed equity trade at a price that is higher than that of the last sale.
Underlying Security The security on which options are being bought or sold.

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