# Security Price

> Security Price means the average closing or bid price of a security, acquired over an explicit period, on a primary exchange or through an authorized agent

**Term:** Security Price  
**Last updated:** 2026-07-29

## Definition

## What Security Price Means in a Contract

Security Price refers to a defined monetary value attributed to a financial instrument, such as a share, bond, or option, for purposes specified within a contract. Rather than leaving the price to be argued over at the moment of performance, parties agree in advance on a method for calculating it, often by referencing an average of closing or bid prices over a set window of trading days. This approach reduces disputes because both sides know exactly how the number will be derived and can independently verify it.

In practice, Security Price acts as a mechanical input that feeds into other contractual obligations. It might determine how many shares are issued upon conversion of a note, how a payout is calculated under an earn-out, or how collateral is valued under a financing arrangement. Because so much can hinge on this single figure, contracts typically spell out the exact source, timeframe, and calculation methodology rather than relying on vague language like.

## Context

### Relevant circumstances

- Buying, selling or trading securities
- Establishing financial services contracts
- Setting the conditions for an investment agreement

### Relevant sectors

- Finance
- Investment
- Banking

## Relevant contract types

- [Investment Agreement](https://www.genieai.co/en-us/template-type/investment-agreement)
- [Stock Purchase Agreement](https://www.genieai.co/en-us/template-type/stock-purchase-agreement)
- [Financial Agreement](https://www.genieai.co/en-us/template-type/financial-agreement)

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