Getting to know the types of securities in Iran Stock Exchange
In today’s world, not only banknotes are valuable, there are also a series of other paper documents that are valuable, from promissory notes to real estate documents, cars, and all kinds of goods. There are other bonds that are used in financial markets and have material value. These papers are known as securities, in this article we examine the types of securities in the stock market.
What are securities?
Securities, as the name suggests, refer to bonds that have value. In other words, securities are a type of financial instrument that create financial rights for their owner.
These papers show a person’s position and ownership in listed companies, which are known as shares; Or they represent a type of debt from a government institution or company, in which case they are called partnership bonds.
These bonds have different types such as ordinary shares, preferred shares, preemptive rights, bonus shares, partnership bonds, derivatives, options, futures contracts and sukuk, each of which has a financial value for its owner.
Any company or institution that issues securities is called an issuer or distributor, and all securities in the capital market are divided into the following three main groups:
debt securities
Equity bonds (shares)
Derivative instruments
What is meant by debt or loan bonds?
Debt bonds or bonds are bonds that the issuing company undertakes to pay a specific amount to the bond holder in specific periods for the amount received from the buyer. Finally, after the end of the specified time and the due date, he is obliged to return the original amount received from the bond buyer.
The company that issued these bonds is obliged to pay the interest and principal of the bonds to the owner of the bonds, but the owner of the bonds does not have ownership in the company itself.
For a reason, these bonds are called debt bonds. These bonds are often issued by companies that have difficulty in securing the capital required for their activities. Instead of borrowing money from a bank, these companies borrow money from people and issue debt securities as evidence of this indebtedness. In financial science, this is called crowdfunding.
This work of companies makes their activities not stay on the ground due to lack of funds and develop and expand day by day, and being indebted to the owners of their bonds is a kind of valuable capital that makes them work harder to pay their debts and is a good capital. It remains for itself in the future.
Also, since the issuing company is obliged to pay certain periodic interest along with the principal of bond owners to them at the due date, investing in these bonds is one of the least risky investments.
There are different types of debt securities that differ in the issuing company and a series of other details. For example, corporate sukuk bonds, government and corporate partnership bonds, interest bonds, government treasury bonds, Istisna bonds, certificates of deposit, murabaha bonds, standard parallel bonds, preferred shares, and collateral securities are types of debt securities.
One of the most important types of debt securities is government and corporate bonds, and as the name suggests, investors participate in a project by purchasing these bonds.
This post is written by sfhjhygfrhesabhaseb