Able to be redeemed prior to Maturity. The Term usually applies to bonds and Convertible securities. The Issuer of a Callable security has to state the conditions under which the security may be called at the time of issue. For most securities, there is a certain initial time period in which the security cannot be called. A bond will usually be called when market Interest rates fall below the Yield being Paid on the bond (bonds are usually called when the price rises to a certain point). To reflect this Risk, a Callable security is usually priced lower than a Non-callable security.
