From Wikipedia, security is defined as:
A security is generally a fungible, negotiable financial instrument representing financial value.1 Securities are broadly categorized into:
* debt securities (such as banknotes, bonds and debentures), * equity securities, e.g., common stocks; and, * derivative contracts, such as forwards, futures, options and swaps.
My questions are:
What does "negotiable" mean here? Those available for me to buy through my brokery company such as Fidelity all have their prices not negotiable to me. Whether I buy a security depends on whether I accept its price, and I have no right to ask for a lower price.
From financial instruments:
Financial instruments can be categorized by form depending on whether they are cash instruments or derivative instruments:
Cash instruments are financial instruments whose value is determined directly by markets. They can be divided into securities, which are readily transferable, and other cash instruments such as loans and deposits, where both borrower and lender have to agree on a transfer.
Derivative instruments are financial instruments which derive their value from the value and characteristics of one or more underlying entity such as an Asset an Index or an Interest Rate. They can be divided into exchange-traded derivatives and over-the-counter (OTC) derivatives.
As I understand, it says securities and derivatives do not overlap. Is this contrary to the definition of securities?
Thanks and regards!