DEFINITION of 'Buy'

1. A recommendation to purchase a specific security. A buy rating from an analyst or research firm is a recommendation to purchase the security, with the implied insistence that the security is undervalued in some fashion.

2. To acquire an asset in exchange for currency. An investor would buy shares of a company by exchanging money or some form of monetary value for the shares.

BREAKING DOWN 'Buy'

1. Exact definitions of a "buy" vary by brokerage, but in general a buy rating is better than neutral but worse than a strong buy, if the brokerage in question issues strong buy ratings. A sell rating on the other hand would be a recommendation to sell the security if currently held, and avoid purchasing it on the open market.

2. Like any buy-sell transaction, buying a security involves an active buyer and seller. While in most cases currency will be exchanged for the security, other forms of payment are also made, such as other securities or services.

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