What is Seasoned Security?
Definition of Seasoned Security
Seasoned Security is a financial instrument that has been traded publicly for a long period of time in the secondary market. Its price shows fluctuations in the initial period. With the passage of time the short-term effects settle down and the price becomes stable.
Explanation of Seasoned Security
The most commonly known example is that if euro market. In the euro market a security becomes a seasoned security after it has been actively trading for a period of 40 days. When an initial public offering (IPO) is launched, its price shows significant volatility immediately following their listing. As the securities spend time in the market their short term effects settle down and price become stable.