A “holder” is an individual or entity that owns the securities or other assets in a portfolio or account.
This term is often used interchangeably with “investor” or “shareholder.”
For example, if you own shares of a company’s stock, you are a holder of that stock. Similarly, if you have purchased a bond, you are a bondholder.
The term can apply to all types of securities, including stocks, bonds, options, futures contracts, and more.
Being a holder of a security generally entitles you to certain rights.
For example, as a stockholder, you may have the right to vote on certain corporate matters, such as the election of the board of directors.
You may also be entitled to receive dividends, which are portions of the company’s earnings that are distributed to shareholders.
However, being a holder also comes with risks. The value of your holdings can go down as well as up, and there’s a chance that you could lose all or part of your investment if the company underperforms or goes bankrupt.
It’s also important to differentiate between beneficial holders and registered holders.
A beneficial holder owns the security but it’s held in another party’s name, such as a brokerage. A registered holder, on the other hand, has the security registered in their own name.