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Security (finance)

Security (finance) Definition

Securities are tradeable interests representing financial value. 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 derivative securities, limited partnership units, and various other formal "investment instruments." Banknotes, checks, and some bills of exchange do not fall into this category.

New issues of securities, including what is commonly known as an IPO, or Initial Public Offering, for new stock issues, are offered on the primary market. Securities that have already been issued may also be traded; this trading is called the aftermarket or secondary market. Secondary markets often consist of what is called an exchange to facilitate the meeting of buyers and sellers. They are often referred to as a stock exchanges, even though there are exchanges such as the Chicago Board of Options Exchange where no stocks are traded.








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