Glossary

Securities

Definition

Any investment instruments, other than insurance policies or fixed annuities, issued by a corporation, government, or other organisation. Securities are typically stocks and bonds.

What are securities?

Securities are, for example, financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option. They are tradable and can be categorised as equity securities (e.g., stocks) and debt securities (e.g., bonds).

Why are securities important to consider when trading?

Securities are the cornerstone of the financial markets, offering investors a way to gain ownership or loan money in return for future returns. Understanding different types of securities and their characteristics is essential for traders to diversify their portfolios, manage risk, and align investments with their financial goals. The performance of securities can indicate the health of the issuing entity and the broader market, making them a key focus for investment strategies.

Put this into Practice

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