vertical security exchange

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Vertical Security Exchange

The trade of one type of security for another. For example, two investors may agree to trade a stock one holds for a bond the other holds. This is often tax-free.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

vertical security exchange

The exchange of one security for a different security (that is, stock for debt or debt for stock). Exchange offers involving unlike securities are generally tax-free unless the investor only receives debt in exchange for stock.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.