Investment Glossary

Uncovered Call

A short call option position in which the writer of the call does not own shares of underlying security of the option contract.

Uncovered Put

A short put option position in which the writer of the put does not have a short position or the underlying security of the option contract.

Underlying

The security on which options are being bought or sold.

Underwriter (Investment Banker)

An intermediary between the offering institution and the investing public, bringing the new issues to the market while charging the issuer a fee for the services provided.

Underwriting

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

Underwriting Manager

The lead firm in a group of underwriters responsible for a new issue.

Uniform Practice Code

Part of the FINRA rules that govern the dealing of member firms with each other.

Unit

A package of securities, such as a bond and warrant that become separable at a later date.

Unit Investment Trust (UIT)

A fixed portfolio of securities purchased by a company registered with the SEC, offering shares in the trust to investors. The difference between a unit trust and a mutual fund is the lack of active management.

Unlisted Security

A security that has not met the requirements to be listed on an exchange.

Unwind

An advanced option order used to intentionally close an existing buy/write or sell/write position.

Uptick

A listed equity trade at a price that is higher than that of the last transaction.

Up-Tick Rule

An SEC rule prohibiting short sale when the last trade on the security was a minus tick.