Marketable securities: meaning, types, and more

The financial market is made up of investments of different classes that have other functions. Depending on how they are issued and traded, they are classified as real estate securities—which requires your attention.

This is part of the most important concepts for investors and can help you decide how to compose your portfolio. In addition, the term is related to security, due to the regulation that is valid for this type of investment.

In this article, you will understand what securities are and how you can invest in them. Check out!

What are marketable securities?

Marketable securities are financial securities issued by public or private institutions, which may be property or credit. Therefore, they can offer both the participation right and just the remuneration right.

Types of existing securities

Now that you know what securities are, you’ll want to understand what the main types are and how they work. 

Below, see what the main types of securities available and their characteristics are!

1. Debentures

A debenture is a credit instrument that public or private corporations can issue. It provides for the payment of fixed, post-fixed, or hybrid returns under terms of terms and liquidity that vary according to the rules defined by the issuer.

The company’s Board must approve the issuance of debentures of Directors. In addition, the process must obtain registration with the CVM.

2. CRIs and CRAs

Real estate receivables (CRI) and agribusiness ( CRA ) certificates are private credit securities. They are issued by securitization companies, which are institutions that acquire the credit rights of companies through the anticipation of receivables.

These securities are backed by the real estate and agribusiness sectors, respectively. The securities also have return, maturity and liquidity characteristics according to the issuer’s definitions.

3. Business notes

Commercial notes or commercial papers act as a promise of payment between the issuing company and the investor. Although they are similar to debentures, they can also be issued by limited liability companies and cooperatives.

In these securities, there are no limits of value or term and the conditions can be agreed upon between the issuer and the investor.

4. Actions

In addition to the fixed-income securities you’ve seen so far, there are variable-income alternatives. One of the main examples is the share , which corresponds to a fraction of the share capital of a company. Thus, whoever acquires these shares participates in the results of the business.

It is worth knowing that shares can give rise to other securities, such as subscription rights. These are proceeds that guarantee the preference to purchase new shares issued via a secondary or follow-on offering, for example.

5. BDR

Securities deposit certificates (BDR) are issued by a depository institution and are backed by assets from the international market. Among the existing BDRs, there are stock alternatives, index funds (ETFs), and international debt securities, for example.

By investing in a BDR, you have the right to participate in the results of the investment backing the certificate. However, you do not become a shareholder in a company or a shareholder in an international ETF, for example.

6. Investment fund shares

Shares of fixed income and variable income investment funds are also considered securities. As they are widely issued and traded in the financial market, they meet the criteria for this classification and must comply with CVM requirements.

It is interesting to know that there are funds with quotas traded on the stock exchange (such as real estate funds or FIIs and index funds), while others are made available on the investment platforms of financial institutions.

7. Derivatives

Derivatives are also classified as securities. They consist of financial instruments linked to market assets — such as stocks, commodities, foreign currencies, indices, etc.

Among the most common derivatives are options, forwards, and futures contracts. In general, they are used for speculation or for portfolio hedging.

What are not securities?

In addition to understanding what securities are and the main types available, it is essential to understand which alternatives are not classified in this way. One of the main examples is public debt securities.

This means that securities issued by the National Treasury and traded on the Treasury Direct are not considered securities in the Brazilian financial market.

Foreign exchange securities issued by financial institutions are also excluded from this classification, with the exception of debentures. This is why a certificate of deposit (CDB), for example, is not considered a security.

How to invest in securities

So far, you’ve seen what securities are and how they rank. Now, it is interesting to know how you can access them to take advantage of these investment opportunities.

Investing in stocks, for example, is done directly by the stock exchange. The same goes for BDRs and some types of investment funds.

In most cases, however, the investment must be made through a regulated market institution. Therefore, the available opportunities will depend on the portfolio offered by the institution.

Furthermore, when choosing the investments that will be part of the portfolio, it is worth getting to know the available options better. With Laqus, for example, you have access to various content on the topic and financial market solutions — such as CRA, debentures and commercial notes.

By studying more about the subject, you will have better conditions to assess market opportunities, favoring your investment strategy. And you can count on Laqus’ support on this journey!

Differences between securities and debt securities

Despite being concepts that may be similar to some people, bonds and securities are not the same thing when we talk about their essence.

Therefore, we can analyze that the difference between bonds and securities lies mainly in the issuance of each one of them, which is the reason why the essence of each one is different.

Debt securities are normally individualized because they represent a credit operation, such as an exchange of present goods for future goods.

On the other hand, security is a term that refers to a series of securities that represent investments.

These, in turn, are issued in series, that is, in high quantity.

However, there is still a difference when we talk about the definition of securities .

Therefore, as a description of this term, we have collective investment bonds or contracts that generate rights.

The rights can be of participation, remuneration or even partnership, and are the result of the provision of services, which income comes from the effort of an entrepreneur or even third parties.

It is worth mentioning that the concept of securities has evolved significantly over the last few decades.

Conclusion

Marketable securities are financial assets that can be easily traded on the open market and are highly liquid. These can include stocks, bonds, and other types of securities that are readily convertible to cash.

How do Marketable Securities differ from Non-Marketable Securities? Non-marketable securities are financial assets that cannot be easily traded on the open market, and are not highly liquid. These can include things like private equity investments, real estate, and certain types of bonds that are not traded publicly. Marketable securities, on the other hand, can be quickly and easily bought and sold on a public exchange.

In this article you found out what securities are and the main types. Thus, you can start planning your investments better to take advantage of alternatives consistent with your investor profile, financial objectives, and return expectations.