13Nice - How to Sell Common Stock Shares
Selling common stock
shares is not a difficult process, but can be expensive for someone that has no
understanding of how common stock is bought or sold. Common stock shares are
shares in an individual company that is sometimes called voting stock. For each
share that is owned, the shareholder is entitled to one vote.
Common shares are
different from preferred stock in one important way: preferred shares do not
give the shareholder voting rights but all dividends issued by the company will
be paid out to preferred shareholders before common shareholders.
Selling common stock
shares happens every day that the stock market is open, in fact almost all
trading taking place during the trading day are common shares. For the inexperienced,
selling common stock shares may sound difficult, but is usually a rather simple
process.
For example, say someone
received a stock certificate that gave him or her ownership of one thousand
shares in a public company. If the person decided they wanted to convert the
stock into cash by selling the stock, they would first need to take the stock
certificate to someone licensed to sell securities.
For someone that does not
plan on buying or selling in stock in the near future, his or her local bank is
probably the best option. Since almost everyone has a bank account and most
banks, not all, have an employee that handles investments for clients, this
person is usually licensed to sell securities, another name for stocks.
All the person would need
to do is take the stock certificate to their bank in which they have a bank
account, ask for the investment officer and have them place the trade to sell
the common stock at the current price on the open market. Once the stock clears
and is delivered three days later, the money is available to the person that
sold the stock.
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Another option for someone
that has common stock to sell is to open a brokerage account. Brokerage houses
come in many shapes and sizes with boutique type houses available catering to
the different needs of the many types of investors.
Unless future investments
are planned, a full service, living and breathing broker is not recommended. A
full service broker is very expensive and commissions for one executed trade to
sell common stock can range anywhere from a percentage of the total sell or
hundreds of dollars.
Some brokerage houses
charge by the total amount of shares sold or may charge for each five hundred
500-share increment, or lot of common stock sold. In either case, a full
service brokerage account is not recommended for a one time stock sell.
The best option for
someone that wants to sell common stock is an online brokerage account. Anyone
with access to a computer can open a brokerage account. Once the account is
opened online, the stock certificate is then mailed or sent over night by FedEx
or UPS to the online brokerage house. Commercial carriers such as FedEx or UPS
are preferred since they have a better reputation for guaranteed delivery.
Once the stock certificate
reaches the brokerage house, the stock certificate is then checked against the
transfer agent’s records that issued the certificate to confirm ownership and
then the stock is placed into the shareholders online trading account. Once in
the account, the shareholder is free to sell the stock at anytime during market
hours.
Selling common stock
shares is not difficult and with easy access to online brokerage firms, it is
also inexpensive.
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