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WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
Security
A written evidence, a contract, that represents either ownership, a debt agreement, or the rights to ownership. This contract can be assigned a value and traded.
A share gives the holder the right to own property, which he may not physically possess at the time. [1] Common forms of security include but are not limited to: stocks, bonds, options, futures, swaps, warrants, preferred shares, and debentures. Many securities are traded on markets, where regulatory entities, such as the SEC enforce trading rules. Individuals and institutions invest in securities in order to gain income and/or interest in the issuing company.
The traditional economic function of the purchase of securities is investment, with the view to receiving income and/or capital appreciation. Debt securities generally offer a higher rate of interest than bank deposits, and equities may offer the prospect of capital growth. [2]
15c., “condition of being secure, freedom from care, something which secures” is from 1580s; “safety of a state, person, etc.” is from 1941. Legal sense of “property in bonds” is from mid-15c.; that of “document held by a creditor” is from 1680s. [2]
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