Security (finance)

A security is a type of transferrable interest representing financial value. Traditionally securities have been categorised between debt and equity securities, and between bearer and registered securities.

Related Topics:
Debt - Equity

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The uses that are made of securities have changed over time, both for the issuer and for the holder. Though the purpose of capital raising has sometimes been taken to be a defining characteristic of securities, its uses have expanded greatly in modern times.

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They are often represented by a certificate. They include shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or other options, other derivatives, limited partnership units, and various other formal "investment instruments." Banknotes, checks, and some bills of exchange do not fall into this category. Transferable interest in commodities like oil, food grains or metals can also be referred to as securities. One can enter into contracts to buy or sell various quantities of commodities in various commodity exchanges. These become transferrable interest in the particular commodity.

Related Topics:
Stock - Mutual fund - Bond - Stock option - Derivatives - Banknote - Check

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