Securitiesare

Securitiesare is a term used here to denote the broad class of negotiable financial instruments collectively known as securities. Securitiesare encompasses instruments that grant claims on future cash flows, ownership interests in entities, or derivative rights tied to underlying assets or indices, and that are tradable in capital markets.

Types of securitiesare include debt securities such as bonds and notes, equity securities such as stocks or shares, and derivative securities such as options, futures, and swaps. Hybrid instruments, like convertible bonds or preferred shares, combine features of multiple categories. Each type carries distinct rights, obligations, and risk profiles.

Markets and regulation: Securitiesare are traded on organized exchanges or over-the-counter markets. In primary markets, new issues raise capital for issuers; in secondary markets, existing securities are bought and sold among investors. Regulatory frameworks aim to ensure transparency, fair dealing, and investor protection. In the United States, the Securities and Exchange Commission oversees securities markets; in the European Union, regulators such as ESMA and national authorities perform similar roles.

Valuation and risk: The value of securitiesare depends on expected cash flows, discount rates, and market expectations about risk. Key risks include credit risk, interest rate risk, liquidity risk, and market risk. Credit ratings, analytics, and diversification are commonly used tools to assess and manage risk.

History and impact: Modern securities markets evolved to mobilize savings for investment and economic growth. regulatory reforms after crises established disclosure and fiduciary standards, while globalization and advances in technology have expanded access and efficiency in trading and information flow.

See also: stock, bond, option, exchange, market regulation, capital markets.