Security
A tradable financial instrument representing ownership, a creditor relationship, or a right relating to either.
How it is identified
Test: the instrument is transferable, is issued in standardised units, and represents ownership, debt, or a right over one of these
Unit
qualitative
In depth
The word covers three families at once: equity securities such as shares, debt securities such as bonds and debentures, and derivative securities such as futures and options. What unites them is transferability in standardised units, which is what allows an exchange to make a market in them at all. A fixed deposit is a financial contract but not a security, because you cannot sell it to a stranger on an exchange. In Indian law the definition sits in the Securities Contracts (Regulation) Act, and whether an instrument falls inside it determines whether SEBI regulates it.
Worked example
A share, a government bond, a listed debenture and a Nifty futures contract are all securities and all trade on exchanges. A bank fixed deposit, a chit fund receipt and a private loan agreement are not, and so sit outside SEBI's remit and outside exchange settlement.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Security” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.