Ultra vires activities
	Corporate actions and operations that are not sanctioned by corporate charter, sometimes leading to shareholder lawsuits.
Ultradot
	Applies to derivative products. Firm proprietary software that stores, and sends baskets of stock through SEAQ to either the NYSE or the curb for program trading.
Ultra-short-term bond fund
	A mutual fund that invests in bonds with very short maturity periods, usually one year or less.
Umbrella personal liability policy
	A liability insurance policy that provides protection against damages not covered by standard liability policies, such as large jury awards in lawsuits.
Unamortized bond discount
	Par value of a bond less the proceeds received from the sale of the bond, less whatever portion has been amortized.
Unamortized premiums on investments
	The unexpensed portion of the difference between the price paid for a security and its par value.
Unbiased predictor
	A theory that spot prices at some future date will be equal to today's forward rates.
Unbundling
	Separation of a multinational firm's transfers of funds into discrete flows for specific purposes. See: Bundling.
Uncollected funds
	The amount of bank deposits in the form of checks that have not yet been paid by the banks on which the checks are drawn.
Uncollectible account
	An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay.
Uncovered call
	A short call option position in which the writer does not own shares of underlying stock represented by the option contracts. Uncovered calls are much riskier for the writer than a covered call, where the writer of the uncovered call owns the underlying stock. If the buyer of a call exercises the option to call, the writer would be forced to buy the asset at the current market price. Also called a "naked" asset.
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. The writer has pledged to buy the asset at a certain price if the buyer of the option chooses to exercise it. Uncovered put options limit the writer's risk to the value of the stock (adjusted for premium received.) Also called "naked" puts.
Under the belt
	Long position in a stock.
Underbanked
	When an originating investment banker cannot find enough firms to underwrite a new issue.
Underbooked
	Describes limited interest by prospective buyers in a new issue of a security during the preoffering registration period.
Undercapitalized
	A business has insufficient capital to carry out its normal functions.
Underfunded pension plan
	A pension plan that has a negative surplus (i.e., liabilities exceed assets).
Underinvestment problem
	The mirror image of the asset substitution problem, in that stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to debtholders.
Underlying
	What supports the security or instrument that parties agree to exchange in a derivative contract.
Underlying asset
	The security or property or loan agreement that an option gives the option holder the right to buy or to sell.
Underlying debt
	Municipal bonds issued by government entities but under the control of larger government entities and for which the larger entity shares the credit responsibility.
Underlying futures contract
	A futures contract that supports an option on that future, which is executed if the option is exercised .
Underlying security
	For options, the security that is subject to purchase or sold upon exercise of an option contract. For example, IBM stock is the underlying security for IBM options. For Depository receipts, the class, series, and number of the foreign shares represented by the depository receipt.
Undermargined account
	A margin account that no longer meets minimum maintenance requirements, requiring a margin call on the investor.
Underperform
	When a security is expected to, or does, appreciate at a slower rate than the overall market rate of performance.
Underpricing
	Issuing securities at less than their market value.
Undervalued
	A stock price perceived to be too low or cheap, as indicated by a particular valuation model. For instance, some might consider a particular company's stock price cheap if the company's price-earnings ratio is much lower than the industry average. To refer to undervaluation or overvaluation implicitly assumes some model of valuation. It is always possible that the security is valued correctly and that model applied is wrong.
Underwithholding
	When a taxpayer has withheld too little tax from salary and will therefore owe tax when filing a return.
Underwrite
	To guarantee, as to guarantee the issuer of securities a specified price by entering into a purchase and sale agreement. To bring securities to market.
Underwriter
	A firm, usually an investment bank, that buys an issue of securities from a company and resells it to investors. In general, A party that guarantees the proceeds to the firm from a security sale, thereby in effect taking ownership of the securities.
Underwriting
	Acting as the underwriter in the issue of new securities for a firm.
Underwriting agreement
	The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Compare to agreement among underwriters.
Underwriting fee
	The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services.
Underwriting income
	For an insurance company, the difference between the premiums earned and the costs of settling claims.
Underwriting spread
	The income that is generated by the underwriting syndicate and the selling group, which is essentially the difference between the amount paid to the issuer of securities in a primary distribution and the public offering price.
Underwriting syndicate
	A group of investment banks that work together to sell new security offerings to investors. The underwriting syndicate is led by the lead underwriter. See also: Lead underwriter.
Underwritten offering
	A purchase and sale.
Undigested securities
	Newly issued securities that are not purchased because of lack of demand during the initial public offering.
Undiversifiable risk
	Related: Systematic risk
Unearned income (revenue)
	Income received in advance of the time at which it is earned, such as prepaid rent.
Unearned interest
	Interest that has been received on a loan, but that cannot be treated as a part of earnings yet, because the principal of the loan has not been outstanding long enough.
Unemployment rate
	The percentage of the people classified as unemployed as compared to the total labor force.
Unencumbered
	Property that is not subject to any claims by creditors. For example, securities bought with cash instead of on margin and homes with mortgages paid off.
Unfunded debt
	Debt maturing within one year (short-term debt). See: Funded debt.
Unfunded pension plan
	Provides for the employer to pay out amounts to retirees or beneficiaries as and when they are needed. There is no money put aside on a regular basis. Instead, it is taken out of current income.
Uniform Commercial Code (UCC)
	Collection of laws dealing with commercial business.
Uniform Gifts to Minors Act (UGMA)
	Legislation that provides a tax-effective manner of transferring property to minors without the complications of trusts or guardianship restrictions.
Uniform practice code
	Standards of the NASD prescribing procedures for handling over-the-counter securities transactions, such as delivery, settlement date, and ex-dividend date.
Uniform securities agent state law examination
	A test required in some states for registered representatives who are employees of member firms of the NASD or over-the-counter brokers.
Uniform Transfers to Minors Act (UTMA)
	A law similar to the Uniform Gifts to Minors Act that extends the definition of gifts to include real estate, paintings, royalties, and patents.
Unilateral transfers
	Items in the current account of the balance of payments of a country's accounting books that correspond to gifts from foreigners or pension payments to foreign residents who once worked in the particular country.
Uninsured motorist insurance
	Insurance that covers the policyholder and family if they are injured by a hit-and-run or uninsured motorist, assuming the other driver is at fault.
Unique risk
	Also called unsystematic risk or idiosyncratic risk. Specific company risk that can be eliminated through diversification. See: Diversifiable risk and unsystematic risk.
Unissued stock
	Shares authorized in a corporation's charter, but not issued.
Unit
	More than one class of securities traded together (e.g., one common share and three subscription warrants).
Unit benefit formula
	Method used to determine a participant's benefits in a defined benefit plan. Involves multiplying years of service by the percentage of salary.
Unit investment trust
	Money invested in a portfolio whose composition is fixed for the life of the fund. Shares in a unit trust are called redeemable trust certificates, and they are sold at a premium to net asset value.
Unit Share Investment Trust (USIT)
	A unit investment trust comprising one unit of prime and one unit of score.
Unit of trading
	See: Trading unit.
United States government securities
	Debt issues of the U.S. government, as distinguished from government-sponsored agency issues.
Universal life
	A whole life insurance product whose investment component pays a competitive interest rate rather than the below-market crediting rate.
Universe of securities
	A group of stocks having a common feature, such as similar outstanding market capitalization or same product line.
Unleveraged beta
	The beta of an unleveraged required return (i.e., no debt) on an investment when the investment is financed entirely by equity.
Unleveraged program
	The use of borrowed funds to finance less than 50% of a purchase of assets. In a leveraged program borrowed funds are used to finance more than 50%.
Unleveraged required return
	The required return on an investment when the investment is financed entirely by equity (i.e., no debt).
Unlimited liability
	Full liability for the debt and other obligations of a legal entity. The general partners of a partnership have unlimited liability.
Unlimited tax bond
	A municipal bond secured by the pledge to levy taxes until full repayment at an unlimited rate.
Unlisted security
	A security traded in the over-the-counter market that is not listed on an organized exchange.
Unlisted trading
	Trading in unlisted securities that occurs on an organized exchange to accommodate members. This practice is not permitted at the NYSE.
Unloading
	Selling securities or commodities whose prices are dropping to minimize loss.
Unmargined account
	A cash account held at a brokerage firm.
Unmatched book
	If the average maturity of a bank's liabilities is shorter than that of its assets, it is said to be running an unmatched book. The term is commonly used with the Euromarket. Also refers to entering into OTC derivatives contracts and not hedging by making trades in the opposite direction to another financial intermediary. In this case, the firm with an unmatched book usually hedges its net market risk with futures and options. Related expressions: Open book and short book.
Unpaid dividend
	A dividend declared by the directors of a corporation that has not yet been paid.
Unqualified opinion
	An independent auditor's opinion that a company's financial statements comply with accepted accounting procedures. Antithesis of qualified opinion.
Unseasoned issue
	Issue of a security for which there is no existing market. See: Seasoned issue.
Unsecured debt
	Debt that does not identify specific assets that the debtholder is entitled to in case of default.
Unsterilized intervention
	Foreign exchange market intervention in which the monetary authorities have not insulated their domestic money supplies from the foreign exchange transactions.
Unsystematic risk
	Also called the diversifiable risk or residual risk. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. Related: Systematic risk.
Unwind a trade
	Reverse a securities transaction through an offsetting transaction in the market.
Up
	Market indication; willingness to go both ways (buy or sell) at the mentioned volume and market. Print; up on the ticker tape, confirming that the trade has been executed.
Up tick
	Plus tick.
Upgrading
	Raising the quality rating of a security because of new optimism about the prospects of a firm due to tangible or intangible factors. This can increase investor confidence and push up the price of the security.
Upset price
	The minimum price at which a seller of property will accept a bid at an auction.
Upside potential
	The amount by which analysts or investors expect the price of a security may increase.
Upstairs market
	A network of trading desks for the major brokerage firms and institutional investors, which communicate with each other by means of electronic display systems and telephones to facilitate block trades and program trades.
Upstairs order
	Used for listed equity securities. Off-floor order.
Upswing
	An upward turn in a security's price after a period of falling prices.
Uptick rule
	SEC rule that selling short is allowed only on an up tick.
Uptick trade
	A transaction that takes place at a higher price than the preceding transaction involving the same security. Related: Tick test rules.
Useful life
	The expected period of time during which a depreciating asset will be productive.
U.S. Treasury bill
	U.S. government debt with a maturity of less than a year.
U.S. Treasury bond
	U.S. government debt with a maturity of more than 10 years.
U.S. Treasury note
	U.S. government debt with a maturity of one to 10 years.
Usury laws
	Laws limiting the amount of interest that can be charged on loans.
Utility
	A power company that owns or operates facilities used for the generation, transmission, or distribution of electric energy, which is regulated at state and federal levels.
Utility function
	A mathematical expression that assigns a value to all possible choices. In portfolio theory, the utility function expresses the preferences of economic entities with respect to perceived risk and expected return.
Utility revenue bond
	A municipal bond issued to finance the construction of public utility services. These bonds are repaid from the operating revenues the project produces after the utility is finished.
Utility value
	The welfare a given investor assigns to an investment with a particular expected return and risk.