DEFINITION of ‘Cabinet Security’
A security that is listed under a major financial exchange, such as the NYSE, but is not actively traded. A cabinet security is traded by an inactive investment crowd, and is more likely to be a bond than a stock.
BREAKING DOWN ‘Cabinet Security’
The “cabinet” in cabinet security refers to the physical place where bond orders were stored off of the trading floor. The cabinets would typically hold limit orders, and the orders were kept on hand until they expired or were executed.