Security

What Is a Security?

Securities are tradable financial assets. These include stocks, bonds, and derivatives through the overall list is much broader.

In the past, a security was a piece of paper that proved ownership. However, now it’s more likely to be an electronic record, stored on a financial institution’s server that confirms an individual’s right to the asset.

The owner of a security is either a creditor, an owner of a share in an enterprise or someone with rights to ownership.

Types of Securities

A stock represents ownership in a public corporation. A stock is also known as a share because the number of shares owned by an individual or institution determines their proportional ownership stake in the company.

The owner of stock is entitled to a corresponding portion of the assets of a company if it were to be liquidated, and is entitled to any benefits the company bestows upon its stockholders, e.g., dividends, splits, etc. Two major types of stock are common and preferred.

A bond is a debt instrument created by a borrower for a specific amount of capital for a specific period of time. The purchaser of the bond is the lender, or bondholder; the lender receives interest payments from the borrower on specific dates until the bond matures, at which time the borrower returns the original amount of the bond to the lender.

A derivative is a security based on an underlying asset, and is often called a contract because it depends upon the parties of the agreement complying with a specific set of terms.

Two major types of derivative contracts are forward commitments (e.g., futures) and contingent claims (e.g., options). The value of the derivative depends indirectly upon the price fluctuations of the asset that underpins the contract. Derivatives are commonly used to hedge established positions, reduce exposure to the risk of price fluctuations, and for pure speculation.

Finding Information About Securities on Investing.com

Information about many securities is available at Investing.com. Each security has its own page, containing general information, charts, news and analysis, financial reports, technical analysis, and a forum, e.g., Amazon (NASDAQ:AMZN), U.S. 10-year future, and gold futures contract.

The Stock Screener at Investing.com makes comparing stocks from around the world easy with filters at the top of the page. The filters allow the user to select the country, sector, and more criteria. Additional criteria at the left side of the screen makes sorting by company performance easier. Results appear below the filters in a table with sortable columns and tabs for various types of information, including performance, technical, and fundamental.

The Commodities page summarizes futures securities market activity with tables and sortable columns.

The Mutual Funds securities page includes a searchable database with results displayed in a table with sortable columns.

Information about additional securities is available on the Government Bonds page, the ETFs page, and the Currencies and Cryptocurrency pages.