For investors, a critical step is to understand the range of financial tools, or securities, that are available to investors.
Securities is a general term that refers to all types of stocks, bonds and money market instruments.
And, no matter which securities you choose to invest in, you also need to understand the regulated market system in which the purchase and sale of these financial instruments occurs. Centralized trading is done through what is known as the stock exchanges. The securities that trade on these two primary exchanges tend to be those of blue chip or large companies. Many companies, however, are not listed on these exchanges. Unlike the centralized exchanges, both listed and unlisted securities can be traded on the OTC exchange.