Financial Terms Dictionary - Letter U

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Ultra-low latency direct market access

Ultra low latency trading involves financial trading systems that are designed to execute transactions in microseconds, offering a competitive advantage in markets where timing is crucial.

Umbrella fund

An umbrella fund is a collective investment scheme that exists as a single legal entity but has several distinct sub-funds which are traded as individual investment funds.Learn more

Underlying Asset

An underlying asset is a financial asset upon which a derivative's price is based, such as stocks, bonds, commodities, or currencies.

Underwriter

An underwriter is an individual or entity that assesses and accepts another party's risk in exchange for a fee, typically in the context of insurance or issues of securities in financial markets.

Underwriting

Underwriting meaning is the process by which an individual or institution takes on financial risk for a fee, such as in the issuance of securities or in an insurance policy.

Underwriting contract

An underwriting contract is an agreement wherein the underwriter commits to buy and then resell a specified number of securities, absorbing the risk of being unable to sell them at the agreed price.

Underwriting profit

Underwriting profits are the earnings that an insurance company generates from premiums after deducting the costs of claims and operating expenses.

Underwriting rate

The underwriting rate is the fee that underwriters charge for underwriting securities or insurance policies, which can vary based on the risk assessment and market conditions.

Underwriting spread

The underwriting spread is the difference between the price at which underwriters buy an issuance from the issuer and the price at which they sell it to investors.

Unit investment trust (UIT)

A unit investment trust (UIT) is a type of investment company that offers a fixed portfolio of stocks and other assets as redeemable units to investors for a specific period of time.

Unit price

Unit price is the cost assigned to a single unit of measure, such as an item or service, typically used in retail or wholesale contexts to determine pricing per unit sold.

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Unit trust

A unit of trust generally refers to the basic measure or quantity in a trust arrangement, which might denote the beneficiary's share or entitlement within the trust's holdings.

United States Navy Working Capital Fund

United States Navy Working Capital Fund is a fund that provides the US Navy with resources to cover the cost of goods and services that the Navy provides to other parties, operating on a revolving fund mechanism.

Unlisted public company

An unlisted public company is a firm that has issued securities through an initial public offering but is not traded on a formal exchange like the NYSE or LSE.Learn more

Unsubordinated debt

Unsubordinated debt refers to obligations that take priority over other unsecured or junior debt owed by the issuer in the event of a bankruptcy or liquidation.

Unsystematic Risk

Unsystematic risk, also known as specific risk, refers to the risk associated with a particular company or industry. Unlike systematic risk, it can be mitigated through diversification in an investment portfolio.

Untradeable assets

Non tradable assets are assets that cannot be easily bought or sold in a public market. This could include private investments, certain types of real estate, or bespoke financial instruments.Learn more

Upside beta

Upside beta measures the volatility of an asset’s returns relative to a benchmark during periods when the benchmark has risen. It indicates how much an asset is expected to gain in value when the market trends upward.

Upside potential ratio

The upside-potential ratio compares the potential for an investment's future value to increase against its likelihood of declining. It is used by investors to assess reward versus risk.

Upside risk

Upside risk refers to the potential of investments to exceed the expected returns, highlighting the possibility of achieving higher-than-anticipated gains.Learn more

US Tech 100 Index

The US Tech 100 is an index which includes 100 of the world’s largest non-financial companies listed on the wider NASDAQ Stock market, based on their market capitalisation.

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US Tech 100 Volatility Index

The US Tech 100 Volatility Index measures the market sentiment for the underlying US Tech 100 index by taking into account the prices of US Tech 100 index options.

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US Treasury

The US Treasury is the national treasury of the United States, where government funds are managed. The department oversees federal finances, including the issuance of bonds and other securities.

Utilitarianism

Utilitarianism is an ethical theory that suggests that the best action is the one that maximises utility, usually defined as that which produces the greatest well-being of the greatest number of people.