Primary Instrument

Dictionary Says

Definition of 'Primary Instrument'

A financial investment whose price is based directly on its market value. Examples of primary instruments include stocks, bonds, certificates of deposit, bills and anything else that has its own value. By contrast, the price of derivative instruments, such as options, swaps and futures, is based on the value of their underlying assets.
Investopedia Says

Investopedia explains 'Primary Instrument'

While the markets have established hundreds of instruments to facilitate the flow of capital and the management of risk, primary investments like stocks are what most beginning investors think of when they think about investing. This is because investing in primary instruments requires only basic knowledge of markets and investment principles.

A non-primary instrument would be something like a call option, which gives the owner the right to purchase the underlying stock at a certain price. So, if the price of the stock goes up, the call option's value also goes up. The call's value is based on the value of something else so it is not a primary instrument.
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'Primary Instrument'

  • Who bears the risk of bad debts in securitization?

    http://www.investopedia.com/ask/answer/07/securitizationrisks.asp
    ... This is one of the primary risks associated with securitized assets, such as
    mortgage-backed ... Each instrument is of equal priority when receiving payments. ...
  • An Overview Of Annuities

    http://www.investopedia.com/articles/retirement/05/063005.asp
    ... Because they are a long-term, retirement planning instrument, most annuities have ...
    How They Work Generally speaking, there are two primary ways annuities are ...
  • Trade Forex With A Directional Strategy

    http://www.investopedia.com/articles/forex/08/directional-trading-strategies.asp
    ... Once the forex trader has decided which venue(s) and instrument(s) he or she ... usually
    display a period of back and forth action sloped against the primary trend ...
  • 3 Deadlines For Retirement Plan Beneficiaries

    http://www.investopedia.com/articles/retirement/03/120303.asp
    ... Death Amounts John designated the following individuals as the primary beneficiaries
    of ... October 31: Deadline to Provide Trust Instrument Generally, the life ...
  • Series 7 Study Guide - Packaged Securities - Compliance ...

    http://www.investopedia.com/exam-guide/series-7/packaged-securities/compliance.asp
    ... D; 9.9 Secondary Offerings and Shelf Distributions; 9.10 Primary Market for ... important
    topic because investment companies are considered the instrument of choice ...
  • Series 7 Study Guide - Derivatives - Closing Transactions ...

    http://www.investopedia.com/exam-guide/series-7/derivatives/closing-transactions.asp
    ... Regulation A & D; 9.9 Secondary Offerings and Shelf Distributions; 9.10 Primary
    Market for ... holder elects to put into effect the rights that the instrument confers ...
  • Series 7 Study Guide - Risk and Tax Considerations - Introduction ...

    http://www.investopedia.com/exam-guide/series-7/investment-risk-tax-considerations/default.asp
    ... Representative Exam. Risk can be broadly defined as the degree of uncertainty
    that an instrument will earn its expected rate of return. There ...
  • Callable Bonds: Leading A Double Life

    http://www.investopedia.com/articles/bonds/07/callable_bonds.asp
    ... As is the case with any investment instrument, callable bonds have a place within
    a ... Keep in mind that a callable bond is composed of two primary components, a ...
  • Series 7 Study Guide - Portfolio Management - Capital Asset ...

    http://www.investopedia.com/exam-guide/series-7/portfolio-management/capital-asset-pricing-model.asp
    ... 9.8 Regulation A & D; 9.9 Secondary Offerings and Shelf Distributions; 9.10 Primary
    Market for ... say it is a 3% return; a T-bill is a short-term instrument, so if ...
  • Series 7 Study Guide - Customer Accounts - Other Types of Accounts ...

    http://www.investopedia.com/exam-guide/series-7/customer-accounts/partnership-corporation.asp
    ... A & D; 9.9 Secondary Offerings and Shelf Distributions; 9.10 Primary Market for ... advisor
    with documented power of attorney, a legal instrument that delegates ...

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