what is negotiable 
the word negotiable has two distinct meanings in business understanding negotiablemany securities such as stock shares are called negotiable instruments because their ownership can easily be transferred nevertheless the value of a security depends on the market and varies constantly other negotiable instruments such as cash cannot have their value modified a 10 bill will always be worth 10 even though the buying power of 10 can fluctuate with inflation or deflation still it is a negotiable instrument because its legal ownership can be readily transferred from one party to another a legal document or instrument is termed negotiable if it is used in lieu of cash the document represents a promise of payment at some point in the future in context the word negotiable implies a cash value and comes with specific instructions about the timing of future cash flows the term negotiable is used to suggest the document comes with the same good faith commitment as cash characteristics of a negotiable instrumentnegotiable instruments contain an unconditional promise to render payment for an exact sum stated on the instrument the agreement includes instructions on timing such as on demand or at some date in the future some negotiable instruments must be made out to a specific person or party negotiable instruments can be redeemed for cash or transferred to another party for a piece of paper to be as good as cash or negotiable by law it must be a written document signed by the entity drawing on the instrument making it marketable or transferable it must also have an explicit order or promise to pay a specific amount of money types of negotiable instrumentsseveral types of negotiable instruments are used in financial transactions a check is a dated draft instructing a bank to make a specific amount payable on demand checks can be written by an individual or a company stipulating an amount to be paid to the payee 