Stock Power

AAA

DEFINITION of 'Stock Power'

A legal power of attorney form that transfers the ownership of certain shares of a stock to a new owner. A stock power transfer form is normally only required when an owner opts to take physical possession of securities certificates, rather that holding securities with a broker. A stock power form includes the previous owner's name, a description of the shares to be transferred, the stock certificates and the cost basis of the shares which normally requires a signature guarantee to protect against fraudulent transfers.


A stock power form is sometimes referred to as a security power form.

INVESTOPEDIA EXPLAINS 'Stock Power'

Most often, when buying or selling shares of stock, a retail investor uses a brokerage firm that will take care of any legal documentation required for the transfer of shares to the new owner. Thus, in the vast majority of cases, the owner of the shares of a stock does not take possession of the share certificates and does not have to complete legal paperwork in order to buy and sell shares.

RELATED TERMS
  1. Power of Attorney of Property

    A legal document transferring the legal right to the attorney ...
  2. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  3. Registered Security

    1. The name given to securities whereby ownership is registered ...
  4. Power Of Attorney

    A legal document giving one person (called an "agent" or "attorney-in-fact") ...
  5. Holder Of Record

    The name of the person who is the registered owner of a security ...
  6. Placement Agent

    An intermediary who raises capital for investment funds.
RELATED FAQS
  1. How does an insurance broker make money?

    An insurance broker makes money off commissions from selling insurance to individuals or businesses. Most commissions are ... Read Full Answer >>
  2. What does the variance between the bid and ask price of a stock mean?

    The variance between a security's bid price and its ask price, also known as the bid-ask spread, represents the different ... Read Full Answer >>
  3. When is a share purchase marked as 'settled' by a brokerage?

    The T+3 rule governs the settlement of stock share purchases. Per the rule, set by the Uniform Practice Code, purchases of ... Read Full Answer >>
  4. What financial regulation exist to control the secondary market?

    The secondary market, most commonly referred to as the stock market, is largely built on self-regulating exchanges that also ... Read Full Answer >>
  5. Why is purchasing stocks on margin considered more risky than traditional investing?

    Buying on margin involves borrowing money from a broker to purchase stock. A margin account increases your purchasing power ... Read Full Answer >>
  6. What is the difference between positive correlation and inverse correlation?

    In the field of statistics, positive correlation describes the relationship between two variables which change together, ... Read Full Answer >>
Related Articles
  1. Retirement

    6 Estate Planning Must-Haves

    You need an estate plan even if you don't have significant assets. Learn what you need to include in yours.
  2. Options & Futures

    Three Documents You Shouldn't Do Without

    Estate planning is not just about the division of assets after you die. Read on to save your loved ones extra grief.
  3. Options & Futures

    Your Will: Why You Need A Power Of Attorney And Beneficiaries

    What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
  4. Retirement

    The Top 3 Retiree Worries (And What To Do About Them)

    Discover the most common problems retirees face, and what they can do to solve them.
  5. Retirement

    Letter Of Instruction - Don't Leave Life Without It

    This simple document can take the guesswork and headache out of settling your estate.
  6. Professionals

    Top Strategies on How to Become a Stock Broker

    Gunning to be a stock broker and want an edge? Here's some veteran advice.
  7. Trading Systems & Software

    Steps to Starting Up an Independent Broker Dealer

    Launching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
  8. Brokers

    Can Tradier's Brokerage API Replace Traditional Brokers?

    Tradier, an up-and-coming brokerage firm that’s carving a niche for itself as the world’s “first brokerage API company,” according to spokesperson Frances Del Valle.
  9. Investing Basics

    Explaining Market Value of Equity

    Market value of equity is the total value of all the outstanding stock as measured in the stock market at a particular time.
  10. Investing Basics

    What is Spread?

    Spread has several slightly different meanings depending on the context. Generally, spread refers to the difference between two comparable measures.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center