NEGOTIABLE SECURITY Meaning and
Definition
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A negotiable security, also known as a negotiable instrument, is a type of financial instrument that can be legally transferred and traded between parties. It is a contractual agreement or a written promise that guarantees payment to the bearer or assigned party. These securities possess specific characteristics that allow them to be easily bought, sold, or traded in the market.
Negotiable securities are typically issued by governments, financial institutions, or corporations to raise capital. They include various types of instruments, such as stocks, bonds, promissory notes, bills of exchange, and certificates of deposit. These instruments are considered negotiable because they can be transferred or assigned to another party, either by endorsement or delivery, without altering the terms of the underlying agreement.
The transferability and marketability of negotiable securities provide benefits to both the issuers and investors. For issuers, it offers a convenient way to raise funds quickly by attracting potential buyers. Investors, on the other hand, gain liquidity as they can readily sell or trade these securities in secondary markets.
To ensure the smooth functioning of negotiable securities, they must meet certain criteria. They need to be in a written form that clearly states the obligations or rights of the parties involved. Additionally, they should be payable to the bearer or an identified person, allowing subsequent holders to assume ownership without complications. Lastly, negotiable securities must be transmissible without the need for complicated legal procedures or burdensome restrictions.
Overall, negotiable securities play a crucial role in facilitating financial transactions, capital raising, and investment opportunities in the global marketplace.
Common Misspellings for NEGOTIABLE SECURITY
- begotiable security
- megotiable security
- jegotiable security
- hegotiable security
- nwgotiable security
- nsgotiable security
- ndgotiable security
- nrgotiable security
- n4gotiable security
- n3gotiable security
- nefotiable security
- nevotiable security
- nebotiable security
- nehotiable security
- neyotiable security
- netotiable security
- negitiable security
- negktiable security
- negltiable security
- negptiable security
Etymology of NEGOTIABLE SECURITY
The word "negotiable" is derived from the Latin word "negotiabilis", which comes from the verb "negotiari", meaning "to carry on business" or "to trade". It later evolved to "negotium", referring to "business" or "employment".
The term "security" traces its origins to the Latin word "securitas", which emerges from the combination of "se-" (meaning "without") and "cura" (meaning "care"). It initially signified the concept of "free from care" or "free from danger", and it gradually extended to mean a safeguard, protection, or assurance against risk or harm.
When combined, "negotiable" and "security" form the compound term "negotiable security".
