When a stock is purchased, the ownership of the shares
may be listed in one of two ways. "Listed" means how the
corporation tracks the ownership of their stock. If you
choose to have the stock listed in your name, you will
receive the actual stock certificates.
Most investors choose to have the ownership listed in
the broker's name, called "held in street name", with
the broker keeping track of whose trading account the
stock actually belongs to. The benefits are reduced
paperwork, consolidated portfolio statements, no
concerns about storing and processing the paper
certificates, and the ability to instantly sell and
transfer the shares. Either way, any dividends are
credited to your account.
Stocks held in street name are insured up to $500,000 by
the federal government against fraud or financial
failure of the brokerage company.
Other Stock Market Basics Topics:
-
Stock Market Basics
- Why invest in the stock market?
- Why Sell Stock?
- How are shares bought and sold on the NASDAQ?
- How stocks are traded on the New York Stock Exchange
- What are ECNs?
- Supply and Demand
- American Stock Exchanges
- International Stock Exchange
- What fuels demand for a stock?
- More to Know About Stock Trading
- Limit Orders
- Market Capitalization
- Preferred Stock
- How to Buy Stock?
- How much money do you need to open a brokerage account?
- Money Market Funds
- Margin Loans and Investment
- Corporation Executive Pay
- How much money do you need to open a brokerage account?
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