A security is essentially a tradable financial instrument. When you buy a stock, you’re purchasing a share of ownership in a company. When you buy a bond, you’re lending money in exchange for interest. Options and other derivatives give you rights tied to the price movement of an underlying asset. All these are considered securities because they can be issued, traded, transferred, and regulated.
Securities are fundamental to the functioning of modern markets. They give companies a way to raise capital—by selling shares or issuing debt—and they give investors opportunities to grow wealth, diversify portfolios, and manage risk. Every security comes with its own risk profile, return potential, and legal structure. Because securities represent value and can affect financial stability, they are closely regulated.
The term “security” covers a broad range of assets, from traditional stocks and bonds to more complex instruments like mortgage-backed securities, futures, and structured notes. Whether simple or sophisticated, all securities play a role in moving capital through the financial system.
Securities matter because they power investment markets, allow businesses to raise money, and help investors build diversified portfolios. They are central to how capital flows through the economy.
Regulators often use legal tests—such as the Howey Test in the U.S.—to determine whether an asset qualifies as a security. The key questions include whether investors contributed money, expect profits, and rely on the efforts of others to generate those profits. If so, the asset typically falls under securities laws and must follow strict disclosure and compliance rules.
Securities generally fall into three groups: equity securities (like stocks), debt securities (like bonds and notes), and derivative securities (like options, futures, and swaps). Each category offers different risk-return profiles and serves different purposes in a portfolio—from income generation to hedging to speculation.
Companies issue stock to raise equity financing or issue bonds to borrow money directly from investors. By selling securities, companies fund expansion, research, hiring, and acquisitions. Investors benefit by receiving dividends, interest, or potential price appreciation in exchange for providing capital.
A company wants to build a new manufacturing facility. Instead of taking out a bank loan, it issues bonds—securities that investors can buy. The company receives cash upfront, and investors receive interest payments for the life of the bond.
FinFeedAPI’s SEC API is the best match for analyzing securities because it provides official filings that detail stock issuances, bond offerings, structured products, and other security-related information. Developers can use this data to research offerings, track regulatory disclosures, and build tools that monitor securities across public markets.
