Origin: Germanic Old English prefix
Underlying has 6 different meanings across 1 category:
The entity from whose performance a derivative derives its value.
"In options trading, the underlying is the stock or commodity that determines the price movement of the contract itself."
In plain English: An underlying factor is a hidden cause that exists beneath the surface and makes something happen.
"The underlying cause of the argument was a difference in their values."
Usage: Use this term to refer specifically to an asset or market index that determines the price of a financial derivative, such as stocks in an equity option. It is distinct from general synonyms like "basis" because it strictly denotes the source instrument upon which the contract's payoff depends.
present participle of underlie
"The underlying cause of the system crash was a memory leak that had gone unnoticed for months."
In plain English: To lie beneath something else and cause it to happen.
"The underlying cause of the conflict remains unknown."
in the nature of something though not readily apparent
"shortcomings inherent in our approach"
"an underlying meaning"
located beneath or below
"The underlying layer of soil was rich in nutrients, hidden beneath the topsoil we had already dug up."
being or involving basic facts or principles
"the fundamental laws of the universe"
"a fundamental incompatibility between them"
"these rudimentary truths"
"underlying principles"
lying underneath
"The artist carefully peeled away the top layer of paint to reveal the underlying sketch beneath."
In plain English: Underlying means something that exists beneath the surface and causes what you see on top.
"The report revealed an underlying fear that caused the team to hesitate during the meeting."
The word underlying comes from combining the prefix under with the verb lie and the suffix -ing. It originally meant to be situated beneath something else before evolving into its current figurative sense of being fundamental or hidden within a larger system.