From an investment perspective, a security has many different meanings including: 1) an instrument that constitutes an ownership position (or holdings) in a business entity (corporation)- i.e., a stock or share of stock, 2) a creditor relationship with a corporation or government agency/ body- that is, a bond, or 3) rights to ownership (rights exercisable in the future into stock holdings/ ownership position) such as the rights represented by options, subscription warrants/ subscription rights.
In the context of finance, a security is a collateral posted by a debtor at the disposal of its lender to secure the money lent (a loan) in terms of principal repayment and interest payment- i.e., a collateral security. For example, in a mortgage loan, a mortgagor, having purchased a real estate with the proceeds of the loan, agrees to put up the real estate as a collateral to the benefit (security) of the lender (mortgagee) over the course of the loan’s term. If the loan is not repaid as scheduled, the lender would have the right to seize the security (collateral) and offer it for sale in order to redeem the principal and other dues.
In another different context, a security may imply a personal security whereby a person (natural or juristic/ legal) guarantees another person’s primary obligation- in this sense, a security is a guarantee.
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