• securities are financial instruments that are exchanged among the investors in the forms of debt, equity or an agreement for a specific return value for the principal is decided

Securities - Categories

• debt securities - securities that are used for the purpose of obtaining credit such as banknotes, debentures, bonds
• equity securities - securities that are being transacted as a result of the investors’ interest towards the assets of firms (stocks and shares)
• options, futures, and forwards formulate an agreement between two parties to buy or sell assets in the future date at a pre-agreed price

Shares

• shares are identified as a type of security that aims to raise funds for the corporations from the market
• unlike the other securities, the market price of shares is determined by the demand and supply situation in the market
• common shares and preferred shares

Indirect Investment vs Direct Investment

• Indirect Investment involves owning shares indirectly (e.g. mutual fund, exchange-traded fund, etc)
• Direct Investment involves direct ownership of shares