If I place an order for a specific amount of a certain stock with a broker and ask them to purchase them for me, how do they then transfer ownership to me after they have bought them? Do they simply use the stock transfer method, treating the stock as a gift? OR Do they short sell them to you and only you,, not the market? Does anyone know the process? Thanks
After you buy the stock through your broker, it takes 2 days for the transaction to clear-Buyer pays for shares, sell delivers the shares. Then the stock is held in "street name" or the name of the broker with a journal entry to show who the beneficial owner is. https://www.investopedia.com/ask/answers/185.asp
Thanks for your reply Robert. I think I'm orientating this question towards the public client / broker process, when I should be asking about institutional client / institutional broker processes. What I'm trying to establish possibly has more to do with Dark Pools than anything else. That's my mistake as above I've asked about brokers in general. So what I want to understand is, is there a situation during a purchase order from an individual client or institutional client where 1 - The shares are bought on the open market for the client, and 2 - those shares are then transferred to the client by selling those shares to the client? I've read your website and interestingly you will know allot about dark pools which is pretty much what I should have asked you about originally. So, in this situation where an institution's is selling shares to their clients (sourced from this pool of liquidity), I would imagine that order would have to be transferred to the client by what I suspect is a sale of those assets. Possibly a 'short sale' ? If so, I also suspect that this would be recorded as a short sale?
something to research -- the difference between an Introducing Broker (an "IB" unrelated to Interactive Brokers ) and a DMA (Direct Market Access) *then* take that knowledge, and read about dark pools. Ultimately, you'll find that market price, price/earnings ratios, and The Latest Tweet matter a whole lot more....
Registered just to answer. In short, no. You have a fundamental misunderstanding of how brokers operate. They provide you access to the markets where you directly buy/sell with the exchange and they take custody of your assets. They are not engaging in trade in you.
yes that's right, as mentioned, I did say that I should have been asking about dark pools. But I got half my answer anyway. So I now know that the broker doesn't sell on anything and thus, I can rule them out of this question. Dark pools and their transfer of ownership to the client is where I'm heading? How is this done?