What is Security (Financial Asset)?

A security in its purest form is any tradeable financial asset like a stock, bond, commodity, or derivative. However, the term varies by geographical location because different jurisdictions use different legal classifications to determine what constitutes a security. The Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and other regional and global regulatory bodies help define securities in their respective jurisdictions. Even some cryptocurrencies are considered securities in different regions. More generally, securities are classified into three types: equity, debt, and a hybrid between the two.