What is a Cabinet Security?
Cabinet securities are bonds and stocks that are listed on an exchange but do not have much in the way of trading activity. In general, there are far more bond issues that are classified as a cabinet security than stock options. It is not unusual for investors to own small lots of investments that fit into the cabinet security model, although few investors choose to build the portfolio around these types of stocks and bonds. One of the identifying characteristics of a cabinet security is the number of shares that are usually included for sale in an offering. Unlike most investment options that trade in lots of one hundred shares, a cabinet security usually trades in much smaller lots. It is not unusual for a cabinet security to trade in a small lot, such as ten shares. In some cases, a cabinet security may be traded in a lot as small as five share units. The exact origin of the designation of these types of holdings as a cabinet security is somewhat obscure. Some financial historians t
