Underlying Commodity

The cash commodityThe physical or actual commodity as distinguished from the futures contract, sometimes called spot commodity or actuals. underlying a futures contractAn agreement to purchase or sell a commodity for delivery in the future: (1) at a price that is determined. Also, the commodityA commodity, as defined in the Commodity Exchange Act, includes the agricultural commodities enumerated or futuresSee Futures Contract. contractThe formal legal document, also known as the "policy" that describes the agreement between the policyholder on which a commodity optionAn option on a commodity or a futures contract. is based, and which must be accepted or delivered if the optionThe unilateral right to do something. For example, the right to renew a lease or purchase a property. is exercised.