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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.
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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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Search results for 'Primary Instrument'
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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. ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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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