Negotiable Value: Definition, Features & Examples

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Negotiable Value (NV) Meaning & Definition | Economics

Negotiable Value
Economics and Marketing

A negotiable value or negotiable security is a common instrument in finance with which its holder can operate in the markets for buying and selling securities.

Within the concept of negotiable value, there are outstanding examples of financial assets such as shares or obligations.

Their owners or holders have the ability to sell them on the stock markets at certain prices. In other words, these types of financial instruments are susceptible to leading profitable and speculative economic activities.

Negotiable securities have an intrinsic property character. Each holder is the holder of a series of property rights   and decision-making capacity over their securities portfolios.

Furthermore, a security of this type can be both public and private, depending on the origin or nature of the issuer. For example, a share of a (private) telecommunications company or a sovereign (public) debt security.

Characteristics of a Negotiable Value

The main features with which this type of assets can be identified are the following:

  • The price of these securities is volatile and undergoes changes. These variations give meaning to the existence of the securities and financial markets.
  • Fluctuations give rise to a return on the investment of said security.
  • Contrary to the above, a risk of financial loss is also possible.
  • All are interchangeable instruments and with which it is possible to operate through buying and selling.
  • Due to the previous point, its ownership is interchangeable. At the same time, it is payable if the consideration is made in the form of money.
  • They must have permanent and exhaustive surveillance of a regulatory entity, as well as market regulatory bodies that prevent  undue financial speculation.

Examples of Negotiable Value

In the context of finance and stock markets, there are many examples of marketable securities.

This type of asset can include bonds, treasury bills, public debt securities, shares in investment or pension funds and all kinds of financial derivatives.

Besides, of course, stocks. Which, we have already mentioned in previous paragraphs.

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