Marketability

Posted in Finance, Accounting and Economics Terms, Total Reads: 696
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Definition: Marketability

A measure of the ability of a security to be bought and sold in a secondary market. If the security has active secondary marketplace, it has a good marketability.

A secondary market is an aftermarket in which an initially traded financial instrument can be traded again e.g. major stock exchanges are an active marketplace for stocks where investors can buy or sell already issued stocks.

Securities which can be sold easily and converted into cash are called marketable securities. Similar to liquidity, Marketability indicates the ease with which an active marketplace is present for the security to be bought and sold. The stocks can be transferred from one investor to another.

Example: Stocks, Bonds, Options, Futures, Commercial Paper, Treasury Bills and other market securities

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