Securities securities industry Key Words and Phrases:

security		цінний папір
claim		вимога
issuer		емітент
stock exchange		фондова біржа
money market		грошовий ринок; ринок ліквідних коштів; ринок короткотермінових боргових зобов'язань
capital market		ринок капіталу
commissions		комісійні
stock, share		акція
register		реєстр
stock certificate		сертифікат акцій
owner		власник
number		кількість
to trust		довіряти
common stock		звичайна акція
preferred stock		привілейована акція
original		початковий
bond		облігація
convertible bond/stock		конвертована облігація/акція
corporate bond		промислова облігація
under certain terms		за певних умов
derivative (security)		похідний цінний папір (цінний папір, вартість якого частково визначається вартістю іншого, основного цінного паперу)
option		право продавати чи купувати цінні папери у встановлений час та за певною згідно угоди
bill		вексель
Treasury bill		казначейський вексель
commercial paper		комерційний вексель
debt instrument		борговий інструмент
maturity		строк виплати, погашення
gilt		облігація, що випускається британським урядом
treasury note		казначейське зобов’язання

The securities industry is made up of a variety of firms and organizations that bring together buyers and sellers of securities and commodities, manage investments, and offer financial advice. The products provided by the industry are called securities.

A security (also called a financial instrument) is a claim on the issuer’s future income or assets. Securities must be listed at the securities markets (stock exchanges). The stock market is organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply. Exchanges set the rules and regulations of the stock market. Examples of major exchanges include the New York Stock Exchange, NASDAQ and the London Stock Exchange.

The securities market has three categories of participants, namely, the issuers of securities, investors in securities and the intermediaries, such as merchant bankers, brokers etc. Investors access the stock market by opening an account with a broker. Brokers execute trading transactions for their customers and in return, customers pay brokers a commission on every trade. Usually stock is obtained through brokers and dealers. Dealers own the securities they trade, while brokers act as agents for the buyers and sellers. Brokers and dealers earn commissions for their services.

Buyers and sellers create supply and demand for stock. The competing pressure from buyers and sellers drives the movement of prices in the stock market.

Security markets are generally separated into short-term and long–term markets. The short-term markets comprise securities with maturities of one year or less and are called money markets. The long-term markets are called capital markets and consist of securities having maturities greater than one year.

There are many kinds of securities. The most basic types of them are stocks and bonds, which provide capital to finance corporations. Stockholders are entered in register and get a stock certificate, a paper with their name and the number of shares they hold. By law, no one under 18 (in some countries under 21) can buy or sell stock, but they can own stock trusting it to an adult. When you hold a stock you are a part owner of a business.These profits come in the form of dividends, which are allocated according to how much stock one holds in the company. Dividends represent a small percentage of total share value.

Stock is divided into common stock and preferred stock. Preferred stock offers to their holders claims to dividends at a fixed rate. These dividends must be paid before any dividends paid on the company’s common stock. The market price for preferred stock tends to be more stable than that of common stock. Common stockholders get their dividends after preferred stockholders have been paid their dividends.

Bonds are also very popular kind of securities. A bond is a long-term debt instrument issued at a fixed rate by government, local authorities and companies to finance their activity. Bonds guarantee payment of the original investment plus interest by a specified future date.

Securities can be convertible. It means that they can be exchanged for another investment in the company, usually in common stock under certain terms.

Another type of security is called a derivative. There are two basic types of derivatives: options and futures. An investor who holds an option has a contractual right to purchase or sell an asset at a set price on a specified date, but is not required to do so. A futures contract is an agreement to purchase or sell an asset at a set price and date with no option to decline. For example, commodities such as corn, wheat, and pork bellies are often bought and sold in this way and are among the best-known derivatives. Other goods sold on the derivatives market include foreign currencies, precious metals, oil and natural gas, and electricity. Buyers purchase derivatives with the hope that the price of the asset involved will be higher than the agreed price when the contract matures.

There are also bills. A bill is a party's order to another party to pay a certain sum on a certain date.

Securities are liquid. They can be exchanged for cash easily.

In the USA there are U.S. Treasury Bills, U.S. Government Securities, certificates of deposit, commercial papers and other securities.

U.S. Government Securities are short-term debt instruments issued by the U.S. government to finance its deficits in 3-, 6-, and 12-month maturities.

U.S. Treasury Bills are short-term debt instruments issued by the U.S. Treasury.

Commercial papers are short-term debt instrument issued by large banks and well-known corporations.