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    HSBC Global Banking and Markets provides financial services and products to corporates, governments and institutions.In-depth economic analysis and advice from a team of global finance experts. 133 (FAS 133) - Accounting for Derivative Instruments and Hedging Activities, an underlying is a specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or other variable (including the occurrence or nonoccurrence of a specified event such as a scheduled payment under a contract).An underlying may be a price or rate of an asset or liability but is not the asset or liability.

    In finance, the underlying of a derivative is an asset, basket of assets, index, or even another derivative, such that the cash flows of the (former) derivative depend on the value of this underlying.From 1933 to 1959 Grosz lived and worked successful in the US.He emigrated to the United States in 1933, and became a naturalized citizen in 1938.For example, in a stock option to buy 100 shares of Nokia at EUR 50 in April 2011, the underlying is a Nokia share.In a futures contract to buy EUR 10 million 10-year German Government bonds, the underlying are the German Government bonds.

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