Beginner investors will have lots of questions that they need to get answered before they can actually invest. Some common questions include “Do I have to buy a block of shares when buying stocks?”, “Can I buy a single share of a company’s stock?” and “How are the stocks held when I buy them?”.
When you are opening a trading account of any type, you will need to make sure you check how the shares are actually traded. You should also check whether there are minimum purchase amounts set out in the contract. Most of the traditional accounts do have minimum trade amounts, these can range from $500 to $2000 depending on the broker. It may also be possible to start with a smaller initial deposit if you sign up for automated purchasing schemes. Most of these brokerage accounts will also charge a maintenance fee or inactivity fee.
How are the Shares Held?
A long time ago, if you held shares in a company then you would normally hold the physical certificate. This is no longer the case, while this is still possible, it is very rare. There are several different ways that stock can be held, these include book entry, street entry and physical ownership.
Stock certificates are not held in a vault somewhere for you. Actually most will be stored digitally. This has several advantages. It makes it very easy to account for the shares, and also means that it is possible to transfer the ownership of them very quickly.
Book Entry is where stock ownership is tracked without the need for physical certificates. Most of the popular online brokerage firms will use book entry systems for their clients.
Street entry is similar to book entry, but the shares of stock are in the name of the brokerage firm rather than the investor’s name. Lots of firms use this method of accounting shares because it makes it easier to transfer stocks between customers of the same broker.
The technological advancements in the stock market have made physical stock certificates very rare and virtually unheard of. Making changes to stock certificates can be difficult and expensive. Of course there are some investors who want to hire a couple of stocks physically, just so they can have the certificate.
One method of holding stock for display purposes is to buy a single share of stock. There are several companies which offer this service, one of the best known is Oneshare.com.
Oneshare.com is not really suitable for investment purposes. It specializes in selling individual stocks for novelty purposes. It is possible to purchase an individual stock to put on your wall, or alternatively to give as a special gift to someone. There are a number of different options to choose from on the website. Stocks purchased in this way are real and you get all the same rights. You still get your annual reports and voting rights. You can find shares from a number of different brands and companies. They also offer a framing service to make your stock certificate look even more special.
There are a number of different methods that stocks can be held. They can be held physically, in street or book. This will depend on the trading platform that you decide to use. If you want a physical certificate for fun, then you can use Oneshare.com to do this.