Security (finance)

A security is a financial contract which entitles the holder to investment returns.

The most common forms of securities are stocks and bonds. More complex forms include futures contracts for commodities and short selling agreements.

Securities can usually be traded on the stock exchange or privately between investors.

The term originates from the concept that the investment agreement is secured by a contract that can be enforced by law. The investor can take the issuer of the security to court if they fail to meet the terms of the agreement.

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