Holding Period

The holding period of a financial security refers to the duration between the time an investor purchases and sells that security. It represents the total time the security is held in the investor's portfolio. In some cases, there may be a mandatory holding period for certain securities, meaning the investor is required to hold the security for a specified period before selling it. This is often seen with certain types of investments or during specific market conditions (e.g., lock-in periods for IPO shares). The holding period can affect the tax treatment of the security, as long-term holdings may benefit from more favorable tax rates in some regions.