Underlying price

The underlying price of an option refers to the current market price of the asset on which the option is based. Options are derivatives, meaning their value is derived (depends on) from this base asset, also known as the underlying asset. The value of the underlying price is key to determining the value and potential profitability of the option. Whether the underlying asset is a stock, commodity, index, or other financial instrument, its price movements directly impact the option's price and the trader's strategy.