Financial Securities are negotiable instruments representing financial value. Securities may be classified into a few debt and equity securities like bonds and common stocks. A company or an organization issuing securities is called the issuer. There may be a regulatory structure for security trading in many nations.
There may also be private investment pools, which may have some characteristics of securities. Generally, securities are represented by certificates or electronic book entry interest. The certificates can be bearer or registered. Investorwords.com defines securities as “Property which is pledged as collateral for a loan” (http://www.investorwords.com/4446/security.html).
Some securities are shares of mutual funds and corporate stocks. Bonds issued by governmental agencies, stock options, limited partnership units and various other forms of investment instruments are negotiable.
Securities may be categorized as follows:
Currency of the traded denominations
Rights of ownership
Term to maturity and the whole tenure
Degree of liquidity
Tax related factors
The two major security markets follow:
Primary market: In the primary market, the currency for the securities is accepted by the issuer of securities from the investors.
Secondary market: In the secondary market, the money is transferred from one investor to another.
Last Updated on : 26th June 2013