Bonds are representative of medium and long-term loan securities issued by companies or by the State to finance its expenses in a given period of time.
Owning bonds of a company or other entity means being the creditor of the issuer, thereby having the right to receive interest on a regular basis, and to repay the principal at the end of the loan term.
Commercial paper has the same characteristics as bonds, the difference being that commercial paper is issued for terms not exceeding one year, usually to finance companies' cash deficits.
How can securities be bought or sold on the stock exchange?
In order to purchase or sell securities, investors must contact StockBrokers (Banks authorised to carry out stock exchange transactions) to give their stock market orders (purchase or sale instructions), indicating the quantity of securities for purchase and / or sale and their prices.