Security

Definition

• A fungible and negotiable financial instrument that represents financial value, chiefly denoting ownership (common stocks), debt (banknotes, bonds, and debentures), or the rights to ownership (derivatives including forwards, futures, options and swaps). Securities are given a monetary value and are traded.
• Something deposited or given as assurance of the fulfilment of an obligation. For example, property is often used as collateral for a loan.
• A document which indicates ownership such as a stock certificate or bond.

Synonyms
fungible security, money, tradable security, assets, securities

Related Terms and Acronyms

• Asset-Backed Securities (ABS) — Acronym, Very Important,
  • Securities backed by a pool of assets.
  ➥ Financial security made up of a bundle of assets.
• Bond — Definition,
  • A certificate of debt issued by a government or corporation guaranteeing payment of the original investment plus interest by a specified future date.
• Buyer's Market — Definition,
  • When market conditions favour the buyer.
• Canadian Depository for Securities Limited — Company,
  • Agency responsible for the automatic processing and clearing of all securities transactions in Canada.
• Canadian Investor Protection Fund (CIPF) — Company Est. 1969, Canada, Important,
  • A Canadian not-for-profit that protects investors from a CIPF members' bankruptcy.
  ➥ Non-profit organization that provides investor protection for investment dealer bankruptcy.
• Collateral — Definition,
  • Any property pledged as security for repayment of a debt.
• Common Stock (CS) — Acronym,
  • A security that allocates partial ownership in a corporation, but at a lower standing than preferred stocks.
• Debt — Definition,
  • Money one person or firm owes to another person or firm.
• Derivatives — Definition,
  • Financial contracts whose value is derived from the value of some underlying asset, rate or index. Derivatives are used as risk-management tools by governments and corporations to reduce exposure to risk, mainly related to fluctuations in foreign-exchange and interest rates. Derivative instruments include swaps, options, futures and forward contracts and are used by banks in two principal activities: sales/trading and asset/liability management.
• Equity — Definition,
  • Ownership in an asset.
  • The value of a property minus outstanding mortgage debt and other liens.
• Foreign Currency (FCY) — Acronym,
  • Paper money and coins from other countries.
• Four Pillars — Definition,
  • Refers to the main types of financial institutions: banking, trust, insurance, and securities.
• Futures — Definition,
  • Contracts to buy something in the future at a price agreed upon in advance. They first developed in the agriculture commodity markets but often involve foreign exchange, Eurodollar deposits and government bonds.
• Guarantee — Definition,
  • An enforceable warranty on the promise of quality of a product or formal promise by one person to take responsibility for the debts or obligations of another person if that person fails to meet them.
• Index — Definition,
  • A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes.
• Indexed Annuity — Definition,
  • An annuity where investment performance is pegged to a stock index.
• Inflation-Protected Annuity — Definition,
  • An annuity that guarantees a return equal to or above inflation.
• Initial Public Offering (IPO) — Acronym,
  • When shares of a corporation become available to the public for the first time.
• Internal Rate of Return (IRR) — Acronym, Important,
  • That rate at which the present worth of all present and future investment costs equals the present worth of all present and future investment benefits.
• Investment — Definition,
  • Something you put your money into in order to make money.
• Investment Banking (IBK) — Acronym,
  • Bank operations that manage a bank's funding position, as well as its holdings of Treasury bills, bonds and preferred and common stock.
• Investment Income — Definition,
  • Income that is earned from investments such as interest, dividends, and capital gains.
• Issuer — Definition,
  • A legal entity that develops, registers, and sells securities including stocks, bonds and derivatives.
• Mortgage-Backed Securities — Definition, Important,
  • Securities backed by mortgage debt.
• Mutual Fund — Definition,
  • A type of investment scheme that pools funds from multiple backers and invests them in securities such as stock or bonds.
• Open-end Fund — Definition,
  • A mutual fund that allows investors to buy or sell shares in the fund at their net asset value each business day.
• Passive Activity — Definition,
  • An activity in which a person does not materially participate such as real estate rentals and limited partnerships.
• Passive Loss — Definition,
  • Loss from a passive activity. Passive loss rules limit the amount of passive loss you can deduct to the total of your other income from passive activities.
• Portfolio — Definition,
  • A collection of investments.
• Preferred Stock — Definition,
  • A type of security that signifies part ownership in a corporation and is given preferential treatment over common stocks.
• Private Equity — Definition,
  • Equity not traded on a stock exchange.
• Protected Cell Company (SPC) — Acronym,
  • A company that separates its assets and liabilities into a number of 'cells' to shield itself and each 'cell' from losses.
• Protected Fund — Definition,
  • A mutual fund that guarantees investors a return on their investments.
• Registered Retirement Savings Plan (RRSP) — Acronym, Canada, Very Important,
  • A savings plan introduced by the federal government to encourage Canadians to save money for retirement. The investment and the interest earned on it is sheltered: it will not be taxed as long as it is left in the plan.
  ➥ Tax deferred investment contribution used to reduce income tax.
• Secondary Market — Definition,
  • A market where financial instruments such as stocks, bonds, options and futures are bought and sold to investors.
• Secondary Mortgage Market — Definition, Important,
  • The trade in home loans that are bundled together and sold as securities to investors. It frees money so more people can get mortgages.
• Secured Loan — Definition,
  • Borrowed money that is backed by collateral.
• Securities/Investment Dealer — Definition,
  • One who acts as the agent for another party to buy and sell securities and other investments; also an underwriter.
• Seed Funding — Definition,
  • Money used to start a business.
• Segregated Fund — Definition,
  • Investment vehicles that feature both maturity and death guarantees. Segregated funds share similarities with mutual funds but are categorized as insurance products.
• Seller's Market — Definition,
  • Due to either low supply or high demand, the seller can expect to sell quickly with a high sale price.
• Startup Company — Definition,
  • A recently founded company that works on new products and services.
• Stock — Definition,
  • A share of the ownership of a company.
• Sub Account — Definition,
  • A separate financial account used to keep track of a department's finances.
• Swap — Definition,
  • An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.
• Unaffiliated Investments — Definition,
  • Investments in assets made by an insurance company where they have no control over the assets.
• Unsecured Loan — Definition,
  • An advance of money that is not secured by collateral.