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What is the securities market?

Securities market
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It’s where trades of securities such as stocks and bonds take place based on demand and supply. Securities markets determine price and participants can be both professional and non-professional.

Securities markets are divided into two levels. Primary markets are where new securities are issued, while secondary markets are where existing securities are bought and sold.

Where have you heard about the securities market?

It’s a general term for describing the markets in stocks, bonds and other securities such as options and funds. Keeping up to date with what’s happening in the securities markets is important if you’re an investor.

What you need to know about the securities market...

The securities market encompasses organised exchanges, as well as over-the-counter markets  where trading is done directly between brokers and dealers.

Securities fall into three main categories:

  • Equity securities. This is just a posh name for stocks. When you buy shares, you own part of a company.
  • Debt securities. Also known as fixed-income securities, these are better known as bonds. When you buy them you're lending money to a company.
  • Derivative securities. With these, you're granted the right to trade financial securities at pre-agreed terms instead of owning shares outright. Options contracts are a type of derivative security.

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