Securities are financial instruments that represent an ownership position, a creditor relationship, or rights to ownership. They are a way for entities (such as corporations, governments, or other organizations) to raise capital by selling these instruments to investors. Securities are broadly categorized into three types:

1. Equity Securities: These represent ownership in a company. The most common example is stocks. When you buy a stock, you own a share of the company and may benefit from dividends or capital appreciation if the company's value grows.


2. Debt Securities: These are instruments where the issuer borrows funds from the investor and agrees to pay them back with interest. Examples include bonds, notes, and debentures. Bondholders do not own the company but are creditors entitled to repayment.


3. Derivative Securities: These derive their value from an underlying asset, such as a stock, bond, or commodity. Examples include options, futures contracts, and swaps. They are often used for hedging risks or speculative purposes.



Securities are traded in financial markets, such as stock exchanges, and are regulated to ensure transparency, fairness, and the protection of investors.