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UGMA - Uniform Gifts to Minors Act. Law allowing assets to be distributed and administered in the name of a child. The assets distributed as gifts can only be cash and securities.
Uncovered Put - A short put option position in which the writer does not have a corresponding short stock position or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put. Also called "naked" puts, the writer has pledged to buy the stock at a certain price if the buyer of the options chooses to exercise it. The nature of uncovered options means the writer's risk is unlimited.
Underlying - The security on which options are being bought or sold.
Underlying Security - The security subject to purchase or sale upon exercise of an option contract. For example, IBM stock is the underlying security to IBM options.
Underwriter (Investment Banker) - 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.
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 (UIT) - A package of investments, usually bonds, sold to investors as a unit which is a fractional ownership of the total package. Unlike a mutual fund, the investments in a unit do not change and are not replaced if they mature or are called. Usually sold by brokers.
Unit Trust - Similar to a mutual fund. A portfolio of securities, including mortgage-backed securities, offered by a brokerage or mutual fund.
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 Capital Gain/Loss - Appreciation or depreciation in the value of a security that has not been sold.
Unsecured Obligation - Debt not backed by collateral.
Unwind - An advanced option order that is used with the intention of closing an existing buy/write or sell/write position.
Up-Tick - A listed equity trade at a price that is higher than that of the last sale.
Up-Tick Rule - An SEC rule that states that in most circumstances no short sale may be made when the last trade on the security was a minus tick.
U.S. Treasury Bill (T Bill) - The shortest-term instrument issued by the federal government. The maturities of these discounted issues do not exceed one year at issuance, with three-month (90-day) or six-month (180-day) paper being very common.
U.S. Treasury Bond (T Bond) - The longest-term debt of the federal government, issued in coupon form for period of 10 to 30 years.
U.S. Treasury Note - Debt obligation issued by the U.S. Government in denominations of $1,000–$1,000,000 or more with a maturity of 1-10 years.
U.S. Treasury Securities - Debt obligations issued by the U.S. Government with various face values and maturity dates. Income is generally exempt from state and local but not federal taxes.
UTMA - Uniform Transfers to Minors Act. Law allowing assets such as real estate, paintings, royalties and patents to be distributed and administered in the name of a child_.