Investopedia

Continue to Site »

Digested Security

Filed Under »
Dictionary Says

Definition of 'Digested Security'

A digested security is a financial instrument which an investor has bought and intends to hold for a long period of time. The security is thus effectively taken out of trading. If a large number of investors choose to digest a particular security, then it can result in a relatively illiquid market for that security, making it difficult to buy or sell.
Investopedia Says

Investopedia explains 'Digested Security'

The illiquidity caused by digested securities poses a frequent problem in certain markets. This dilemma is particularly prevalent in the bond market, for example, where many bonds end up in the hands of investors who wish to hold them until maturity. It is common for a particular bond issue to experience a steadily decline in trading volume, as the securities are gradually digested by investors who wish to hold them to maturity.

Articles Of Interest

  1.

    Basics Of Federal Bond Issues

    Treasuries are considered the safest investments, but they should still be analyzed when issued.

  2. The Advantages Of Bonds

    Bonds contribute an element of stability to almost any portfolio and offer a safe and conservative investment.

  3. Understanding Financial Liquidity

    Understanding how this measure works in the market can help keep your finances afloat.

  4. ETF Liquidity: Why It Matters

    Lower levels of liquidity in exchange-traded funds make it harder to trade them profitably.

  5. Common Bond-Buying Mistakes

    Avoid these errors made daily in bond portfolios everywhere.

  6. 10 Great Summer Jobs For Teens

    There are a lot of summer jobs out there, find out what's available, how much it costs and what skills you need.

  7. Career Benefits From The CFA Institute

    The CFA Institute provides members with a variety of ongoing career and networking benefits.

  8. Stop Keeping Up With The Joneses - They're Broke

    Conspicuous consumption could be robbing you of future wealth.

  9. What To Expect On The CFA Level II Exam

    This article will help you understand the nuances of the CFA Level II exam.

  10. Role Of A Market Maker

    A market maker is a firm or an individual that stands ready to buy and sell a particular security throughout the trading session to maintain liquidity and a fair and orderly market in that security. ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center