Foreword
The term security has been well-explained by different websites, for instance, Wikipedia, Investopedia, etc. However, I find that their articles are hard to be understood without certain knowledge. This brief article is written to provide the easiest way for you to understand what security is.
What is security?
In brief, securities are financial assets that could generate profit for investors and could be traded on financial markets.
Types of security
In general, there are three common types of security, including debts, equity, and derivatives.
Debts ⇨ Bonds (Government, company, financial institution debts), Mortgaged backed security (MBS), etc.
Equity ⇨ Common Stocks
Derivatives ⇨ Option, Future, ETF, Forward, etc.
Final Thought
The word security has been widely used in the financial world. Hope this article helps you to understand what security is.
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