assignment on stock exchange

Stock Assignment: Transferring Ownership Rights with Stock Power

1. introduction to stock assignment and stock power, 2. understanding ownership rights in stock, 3. the role of stock power in transferring ownership, 4. ways to obtain stock power, 5. filling out a stock power form, 6. executing a stock assignment, 7. legal considerations in stock assignment, 8. common mistakes to avoid in stock assignment, 9. conclusion and final thoughts on stock power and stock assignment.

Stock Assignment and Stock Power are two terms that are commonly used in the world of stocks and investments. They are often used interchangeably, but they refer to two different things. Stock assignment is the process of transferring ownership rights of a stock from one party to another, while Stock Power is a legal document that authorizes the transfer of ownership rights from one party to another. In this section, we will discuss in detail what Stock Assignment and Stock Power are, how they work, and why they are important.

1. What is Stock Assignment?

Stock Assignment refers to the transfer of ownership rights of a stock from one party to another. This process is typically used when an investor wants to sell their shares to someone else. The seller must sign an Assignment of Stock Certificate form, which is a legal document that transfers ownership rights to the buyer . The buyer must then present the form to the company's transfer agent, who will update the company's records to reflect the change in ownership.

2. What is Stock Power?

Stock Power is a legal document that authorizes the transfer of ownership rights from one party to another. It is typically used when an investor wants to transfer their shares to a family member or a trust. The seller must sign a stock Power form , which is a legal document that authorizes the transfer of ownership rights to the buyer. The buyer must then present the form to the company's transfer agent, who will update the company's records to reflect the change in ownership.

3. What are the differences between Stock Assignment and Stock Power?

The main difference between Stock Assignment and Stock Power is the purpose for which they are used. Stock Assignment is used when an investor wants to sell their shares to someone else, while Stock Power is used when an investor wants to transfer their shares to a family member or a trust. Another difference is the legal document that is used. Stock Assignment uses an Assignment of Stock Certificate form, while Stock Power uses a Stock Power form.

4. What are the benefits of Stock Assignment and Stock Power?

The main benefit of Stock Assignment and Stock Power is that they provide a legal framework for transferring ownership rights of a stock from one party to another. This ensures that the transfer is done legally and that the new owner has full ownership rights to the stock. It also ensures that the company's records are updated to reflect the change in ownership, which is important for tax purposes.

5. What are the risks of Stock Assignment and Stock Power?

The main risk of Stock Assignment and Stock Power is that they can be used for fraudulent purposes. For example, someone could forge an Assignment of Stock Certificate or a Stock Power form to transfer ownership rights of a stock to themselves. To mitigate this risk, it is important to use a reputable transfer agent and to verify the authenticity of the legal documents.

6. Which option is better: Stock Assignment or Stock Power?

The choice between Stock Assignment and Stock Power depends on the purpose for which they are being used. If an investor wants to sell their shares to someone else, then Stock Assignment is the better option. If an investor wants to transfer their shares to a family member or a trust, then Stock Power is the better option. It is important to use the correct legal document and to ensure that the transfer is done legally to avoid any potential risks .

Introduction to Stock Assignment and Stock Power - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to owning stock, it's important to understand the concept of ownership rights. Ownership rights refer to the various privileges that come with owning stock, such as voting rights and the ability to receive dividends. Understanding these rights is crucial for investors who want to make informed decisions about their investments. In this section, we'll take a closer look at ownership rights in stock and what they mean for investors.

1. Voting Rights

One of the most important ownership rights in stock is the right to vote. When you own stock in a company, you are entitled to vote on certain matters that affect the company. These matters can include electing members to the board of directors, approving mergers or acquisitions, and making changes to the company's bylaws. The number of votes you have is typically based on the number of shares you own. For example, if a company has 1,000 shares outstanding and you own 100 shares, you would have 10% of the voting power.

2. Dividend Rights

Another ownership right in stock is the right to receive dividends. Dividends are payments made by a company to its shareholders, usually on a quarterly basis. The amount of the dividend is typically based on the company's profits and can vary from year to year. If you own stock in a company that pays dividends, you are entitled to a portion of those payments based on the number of shares you own.

3. Liquidation Rights

If a company goes bankrupt or is liquidated, shareholders have the right to a portion of the company's assets. This is known as liquidation rights. However, in most cases, shareholders are the last in line to receive payment after creditors and other stakeholders have been paid.

4. Preemptive Rights

Preemptive rights refer to the right of existing shareholders to purchase additional shares in a company before they are offered to the public. This allows shareholders to maintain their ownership percentage in the company and prevent dilution of their shares.

5. Transferability of Ownership Rights

Ownership rights in stock are transferable, meaning you can sell your shares to another investor. When you sell your shares, you transfer your ownership rights to the buyer. However, it's important to note that some ownership rights, such as voting rights, may be restricted for a period of time after the sale.

Understanding ownership rights in stock is crucial for investors who want to make informed decisions about their investments. Voting rights, dividend rights, liquidation rights, preemptive rights, and transferability of ownership rights are all important concepts to understand. When considering investing in a company, it's important to evaluate these ownership rights and consider the potential risks and rewards .

Understanding Ownership Rights in Stock - Stock Assignment: Transferring Ownership Rights with Stock Power

Stock power plays a crucial role in transferring ownership of stocks from one person to another. Without it, the process would be more complicated and time-consuming. In this section, we will explore the different aspects of stock power and its importance in transferring ownership.

1. Definition of Stock Power: A stock power is a legal document that authorizes the transfer of ownership of a stock from the owner (the "grantor") to another person or entity (the "grantee"). It is also known as a stock assignment or a stock power form. The stock power form contains the details of the stock being transferred, the name of the grantee, and the signature of the grantor.

2. importance of Stock power : Stock power is important because it provides proof of ownership transfer and protects both the grantor and the grantee. With a stock power, the grantor can transfer ownership of the stock without physically delivering the stock certificate. This avoids the risk of loss or theft of the stock certificate. On the other hand, the grantee can prove ownership of the stock through the stock power, which is crucial for selling the stock or receiving dividends.

3. Types of stock Power forms : There are two types of stock power forms: "blank" and "special." A blank stock power form is unsigned and does not specify the name of the grantee. It is commonly used for transferring ownership of stocks to a brokerage firm or for depositing the stocks into a trust account. A special stock power form is signed and specifies the name of the grantee. It is used for transferring ownership of stocks to a specific person or entity.

4. How to Fill Out a Stock Power Form: Filling out a stock power form is a simple process. The grantor needs to sign the form and specify the name of the grantee. The grantee also needs to sign the form to acknowledge receipt of the stock. The completed form should be sent to the transfer agent or the brokerage firm that handles the stock.

5. Alternatives to Stock Power: While stock power is the most common way to transfer ownership of stocks, there are alternatives. One option is to use a trust. The grantor can transfer the stock to a trust and name the grantee as the beneficiary. The grantee will receive the stock upon the grantor's death. Another option is to use a will. The grantor can specify in the will that the stock should be transferred to the grantee upon the grantor's death.

Stock power plays an important role in transferring ownership of stocks. It provides proof of ownership transfer and protects both the grantor and the grantee. There are different types of stock power forms, and filling them out is a simple process. While there are alternatives to stock power, it is the most common way to transfer ownership of stocks.

The Role of Stock Power in Transferring Ownership - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to transferring ownership rights with stock power , there are various ways to obtain this crucial document. Whether you are a shareholder looking to transfer your ownership or a company seeking to issue new shares, understanding the different methods available can help streamline the process and ensure a smooth transition of ownership. In this section, we will explore some common ways to obtain stock power, providing insights from different perspectives and comparing several options to determine the best approach.

1. Directly from the Transfer Agent:

One of the most straightforward ways to obtain stock power is by contacting the transfer agent directly. The transfer agent is responsible for maintaining the shareholder records and managing the transfer of ownership. They can provide you with the necessary stock power forms, which typically need to be completed, signed, and notarized before submitting them back to the transfer agent. This method ensures that the required documentation is obtained directly from the authorized party, reducing the risk of errors or fraudulent activity.

2. Online Stock Power Forms:

In today's digital era, many companies offer the convenience of online stock power forms. Shareholders can access these forms through the company's website or a designated platform. Online forms often include step-by-step instructions and may even provide a notary service. This option can save time and effort, as there is no need for physical paperwork or mailing documents. However, it is essential to ensure the online platform is secure and trustworthy, protecting sensitive information from potential cyber threats.

3. Brokerage Firms:

If you hold your shares through a brokerage account, you can obtain stock power through your broker. Brokerage firms typically have their own procedures for transferring ownership and may require specific forms or documentation. Contact your broker to inquire about the process and any associated fees. While this option may be convenient for shareholders who already have a brokerage account, it may not be the best choice for those who prefer a direct relationship with the transfer agent or have shares held outside of a brokerage account.

4. In-person at a Financial Institution:

Some shareholders may prefer to obtain stock power in person, either at their bank or another financial institution . This option allows for face-to-face interaction and immediate access to the necessary forms. However, not all financial institutions offer this service, so it is important to check beforehand. Additionally, consider any associated fees and potential time constraints when opting for this method.

Comparing the different ways to obtain stock power, the best option ultimately depends on your specific circumstances and preferences. If you have a direct relationship with the transfer agent, obtaining stock power directly from them ensures accuracy and eliminates potential intermediaries. On the other hand, online stock power forms can offer convenience and ease of use, particularly for tech-savvy individuals. Brokerage firms provide a viable option for those already utilizing their services, while in-person visits to financial institutions may be preferred by individuals seeking a personal touch.

Understanding the various ways to obtain stock power is crucial for shareholders and companies alike. By exploring the options available and considering the specific requirements and preferences, individuals can choose the most suitable method to transfer ownership rights efficiently and securely.

Ways to Obtain Stock Power - Stock Assignment: Transferring Ownership Rights with Stock Power

When transferring ownership rights with a stock power, there are several important steps to follow. Filling out the stock power form is one of the most crucial steps in this process, as it legally transfers ownership of the stock from one party to another. In this section, we will explore the process of filling out a stock power form, including what information is required, how to properly fill it out, and what to do after it is completed.

1. Understanding the Stock Power Form

A stock power form is a legal document that is used to transfer ownership of stock from one party to another. It is typically used in situations where the actual stock certificate is not available, such as when the stock is held in a brokerage account. The stock power form contains important information about the stock, such as the name of the company, the number of shares being transferred, and the name of the current owner.

2. Gathering the Required Information

Before filling out the stock power form, it is important to gather all of the necessary information. This may include the name of the company that issued the stock, the number of shares being transferred, and the name and contact information of the current owner. It is also important to have the recipient's information on hand, including their name and contact information.

3. Filling Out the Form

When filling out the stock power form, it is important to be accurate and thorough. The form will typically ask for the name and address of the current owner, as well as the name and address of the recipient. It may also ask for the number of shares being transferred, the date of the transfer, and other relevant information. It is important to double-check all of the information before submitting the form.

4. Submitting the Form

Once the stock power form has been filled out, it should be signed and dated by the current owner. Depending on the situation, the form may need to be notarized or witnessed by a third party. The completed form should be submitted to the appropriate parties, such as the brokerage firm or transfer agent.

5. Considerations When Filling Out a Stock Power Form

When filling out a stock power form, it is important to consider several factors. For example, if the stock is being transferred as a gift, it may be subject to gift taxes. It is also important to consider any restrictions or limitations on the transfer of the stock, such as those imposed by the company or by applicable laws and regulations.

6. Best Practices for Filling Out a Stock Power Form

To ensure that the stock power form is filled out correctly and completely, it is important to follow best practices. This may include reviewing the form carefully before submitting it, double-checking all of the information, and seeking professional advice if necessary. It is also important to keep copies of all relevant documents, such as the stock power form and any supporting documentation.

Filling out a stock power form is an important step in transferring ownership rights with a stock power. By following the steps outlined above and considering the relevant factors, it is possible to ensure that the transfer is completed correctly and legally.

Filling out a Stock Power Form - Stock Assignment: Transferring Ownership Rights with Stock Power

Executing a stock assignment is a process that involves transferring ownership rights from one party to another. It is a crucial step in the stock transfer process, and it requires both the assignor and the assignee to follow specific procedures to ensure a smooth transfer of ownership . In this section, we will explore the steps involved in executing a stock assignment and some insights from different points of view.

1. Review the Stock Power Form

Before executing a stock assignment, it is essential to review the stock power form carefully. This document is a legal instrument that transfers ownership rights from the assignor to the assignee. It contains important information, such as the name of the assignor, the name of the assignee, the number of shares being transferred, and the date of the transfer. Both the assignor and the assignee must sign the stock power form in the presence of a notary public.

2. Choose the Right Type of Stock Assignment

There are two types of stock assignments: a full assignment and a limited assignment. A full assignment transfers all ownership rights from the assignor to the assignee, while a limited assignment transfers only specific ownership rights, such as the right to vote or receive dividends. The type of stock assignment you choose depends on your specific needs and circumstances.

3. Consider the Tax Implications

Executing a stock assignment may have tax implications for both the assignor and the assignee. The assignor may be subject to capital gains tax if the stock has appreciated in value since it was acquired. The assignee may be subject to income tax if they receive dividends or sell the stock at a profit. It is important to consult with a tax professional to understand the tax implications of executing a stock assignment.

4. Choose the Right Method of Transfer

There are several methods of transferring ownership rights, including physical delivery, book-entry transfer, and electronic transfer. Physical delivery involves the physical delivery of stock certificates from the assignor to the assignee. Book-entry transfer involves the transfer of ownership rights through an intermediary, such as a stock transfer agent . Electronic transfer involves the transfer of ownership rights through an electronic network, such as the Depository Trust Company (DTC). The method of transfer you choose depends on your specific needs and circumstances.

5. seek Professional assistance

Executing a stock assignment can be a complex process, and it is advisable to seek professional assistance. A stock transfer agent can help you navigate the transfer process and ensure that all necessary procedures are followed. A tax professional can help you understand the tax implications of executing a stock assignment. Seeking professional assistance can help ensure a smooth transfer of ownership rights.

Executing a stock assignment is an essential step in transferring ownership rights from one party to another. It requires careful consideration of the stock power form, the type of stock assignment, the tax implications, the method of transfer, and professional assistance. By following these steps, you can ensure a smooth transfer of ownership rights.

Executing a Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

When transferring ownership rights with a stock power, legal considerations must be taken into account to ensure a smooth and legally valid transaction. These considerations can vary depending on the type of stock being transferred and the parties involved. Here are some of the key legal considerations to keep in mind:

1. Type of Stock: The type of stock being transferred will impact the legal requirements for the transfer . For example, transferring common stock may require different legal documentation than transferring preferred stock. It's important to understand the specific requirements for the type of stock being transferred.

2. Parties Involved: The parties involved in the transfer will also impact the legal considerations . For example, transferring stock between family members may require different documentation than transferring stock between unrelated parties. It's important to understand the legal requirements based on the parties involved.

3. Tax Implications: The transfer of stock ownership can have tax implications for both the transferor and transferee. It's important to understand the tax consequences of the transfer and to consult with a tax professional if necessary.

4. Securities Laws: The transfer of stock ownership is subject to certain securities laws, including the securities act of 1933 and the Securities Exchange Act of 1934. These laws regulate the sale and transfer of securities and may require certain disclosures or filings.

5. State Laws: State laws may also impact the transfer of stock ownership. For example, some states require specific documentation or filings for stock transfers. It's important to understand the state laws that apply to the transfer.

When considering the legal considerations for stock assignment, it's important to consult with a legal professional to ensure compliance with all applicable laws and regulations. A legal professional can also help determine the best option for transferring ownership rights with a stock power.

Options for transferring ownership rights with a stock power include:

1. Direct Transfer: A direct transfer involves transferring the stock from one party to another without the involvement of a broker or intermediary. This option may be simpler and less expensive, but may require more legal documentation and may not be available for all types of stock.

2. Broker-Assisted Transfer: A broker-assisted transfer involves using a broker to facilitate the transfer of stock ownership. This option may be more expensive, but may be easier and more efficient, particularly for larger transfers or transfers involving multiple parties.

3. Gift Transfer: A gift transfer involves transferring ownership of the stock as a gift. This option may have tax implications for the transferor and transferee and may require additional legal documentation.

Ultimately, the best option for transferring ownership rights with a stock power will depend on the specific circumstances of the transfer. Consulting with a legal professional can help determine the most appropriate option and ensure compliance with all applicable legal requirements.

Legal Considerations in Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to stock assignment, there are several mistakes that people make which can lead to legal and financial complications. It is important to understand the process of transferring ownership rights with stock power and avoid these common mistakes.

1. Failing to Complete the Stock Assignment Form Correctly

One of the most common mistakes made in stock assignment is failing to complete the stock assignment form correctly. This can lead to delays in the transfer of ownership rights and can result in legal complications. It is important to ensure that all the required fields are filled out correctly and that the form is signed and dated by the appropriate parties.

2. Not Having a Properly Endorsed Stock Certificate

Another mistake that people make is not having a properly endorsed stock certificate. This is important because the stock certificate is the physical representation of the ownership rights of the stock. It is important to ensure that the certificate is properly endorsed by the seller and that the buyer has the certificate in their possession.

3. Not understanding the Tax implications of Stock Assignment

Another mistake that people make is not understanding the tax implications of stock assignment. Depending on the circumstances, there may be tax implications for both the buyer and the seller. It is important to consult with a tax professional to understand the tax implications before completing the stock assignment.

4. Not Using a Broker or Transfer Agent

Some people try to complete the stock assignment themselves without using a broker or transfer agent. This can lead to complications and delays in the transfer of ownership rights. It is recommended to use a broker or transfer agent to ensure that the process is completed correctly and efficiently.

5. Not Verifying the Identity of the Buyer or Seller

Finally, it is important to verify the identity of the buyer or seller before completing the stock assignment. This can help to prevent fraud and ensure that the transfer of ownership rights is legitimate. It is recommended to use a reputable broker or transfer agent who can help with this process.

Stock assignment can be a complicated process, but by avoiding these common mistakes, it can be completed successfully. It is important to ensure that the stock assignment form is completed correctly, that the stock certificate is properly endorsed, that the tax implications are understood, and that a reputable broker or transfer agent is used. By following these guidelines, the transfer of ownership rights can be completed efficiently and without complications.

Common Mistakes to Avoid in Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

Stock Power and Stock Assignment are important concepts in the world of finance and investment. These concepts help investors transfer ownership rights of their stocks to another party. In this blog post, we have discussed the details of these concepts and their implications. We have also analyzed the different perspectives and provided insights on how to use these concepts effectively.

1. Importance of Stock Power and Stock Assignment

Stock Power and Stock Assignment are essential tools for investors who want to transfer ownership rights of their stocks to another party. These concepts enable investors to transfer their stocks without having to go through the hassle of selling them. This is particularly useful in cases where the investor wants to gift the stocks to someone or transfer them to another account.

2. Understanding Stock Power

Stock Power is a legal document that enables the transfer of ownership rights of a stock from one party to another. It is an endorsement that is required by the brokerage firm to transfer the ownership of the stock. The stock power must be signed by the owner of the stock and must be submitted along with the certificate of the stock to the brokerage firm.

3. Understanding Stock Assignment

Stock Assignment is a process where the ownership rights of a stock are transferred from one party to another. The process involves filling out a transfer form and submitting it to the brokerage firm. The transfer form must be signed by the owner of the stock and must be submitted along with the certificate of the stock.

4. pros and Cons of stock Power and Stock Assignment

Stock Power and Stock Assignment have their own advantages and disadvantages. Stock Power is a simpler process that requires the submission of a single document, whereas Stock Assignment involves filling out a transfer form. However, Stock Power can only be used if the certificate of the stock is in the possession of the owner, whereas Stock Assignment can be used even if the certificate is lost or misplaced.

5. Best Option

The best option depends on the situation. If the certificate of the stock is in the possession of the owner, Stock Power is the best option. However, if the certificate is lost or misplaced, Stock Assignment is the better option. In any case, it is important to consult with the brokerage firm to determine the best option.

Stock Power and Stock Assignment are important concepts that enable investors to transfer ownership rights of their stocks. These concepts have their own advantages and disadvantages, and the best option depends on the situation. It is important to consult with the brokerage firm to determine the best option.

Conclusion and Final Thoughts on Stock Power and Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

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Stock Assignment Agreement: Everything You Need to Know

A stock assignment agreement is the transfer of ownership of stock shares. 3 min read updated on January 01, 2024

Updated November 2, 2020:

A stock assignment agreement is the transfer of ownership of stock shares. It occurs when one party legally transfers their shares of stock property to another party or to a business. It's like the type of assignment agreement that happens when one person sells a car to another, which can also be referred to as assigning the vehicle's title to a new owner.

Examples of Assignment of Shares

In the first example of assignment of shares, the seller is assigning a certain number of shares to the buyer. That number includes the percentage of the shares that the buyer can potentially forfeit. This is only to the extent that the underwriter over-allowed an option, which is described in the company's statement of registration using Form S-1 and amended under the 1933 Securities Act.

Part of those shares the buyer holds can equal up to 25 percent of the total shares. Those shares are referred to as the "buyer earnout" shares and are potentially forfeited by the buyer in the following manner:

• Half of the buyer earnout shares are potentially forfeited if the last price that the company stock sells at doesn't equal or exceed a specified amount, such as $12 per share. This number is arrived at after any stock splits, reorganization, stock dividends are paid, and any recapitalization. These things may have occurred during any 20-day trading period within the past 30 days of trading. It also may have been within the past two years after the company's initial business combination closing.
• Information on the initial business combination closing date is found in the registration statement of the company. In this example, the buyers pay the seller the aggregated amount for all of the shares. The purchase price is what the seller receives as consideration in exchange for the assignment of the company shares.
• At the time of closing the sale, the seller assigns, conveys, and delivers to the company all rights, titles, and interests that the seller holds. This is done by assigning the shares of stock.

Vague Employer Promises to Employees

Before filing for incorporation, some business founders and some business leaders who are promoting a corporation based on a vision might make promises to employees or attorneys that are a bit vague. These promises might focus on offering the other party a share in the business in exchange for their work.

It's also common for a corporation's owner to offer employees a deal where they can earn some share of ownership in the company for working a certain amount of time. It also happens sometimes that, after the employee has fulfilled their part of the deal by working, that main shareholder or company founder might come to regret the deal made earlier. At that time, the shareholder or founder might delay issuing the shares that were promised or flat-out refuse to issue the shares to the employee.

An Example That Went to Court

This example of an employer making vague promises ended up in court. The defendant was the corporation's only shareholder . The defendant entered into a contract with the plaintiff in which he offered to relinquish the existing business and transfer all of his employees and his customers to the plaintiff. The plaintiff was to get one-quarter ownership of the incorporated business when it reached a specific amount of earnings.

• Then, the defendant regretted the decision to make the agreement after finding out it cost more than he had expected and that the business was losing money. At that time, the defendant went to the plaintiff and insisted that the plaintiff start acting like one of the owners by contributing funds and assuming some of the debt.
• The defendant was angry when the plaintiff wouldn't do that. So, he decided to delay the stock issue that had been promised and even got the plaintiff to agree to the delay. The defendant agreed on the condition that the defendant would get the tax write-off from the losses of the S-corporation .
• In the end, the defendant fired the plaintiff without ever issuing the shares that had been promised. As a result, the judgment for the plaintiff regarding the breach of fiduciary duty, referring the debts of the business that the plaintiff hadn't paid off, was reversed by the Supreme Court on the basis that the plaintiff had no duties because the plaintiff was never a shareholder as had been promised.

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• How to Issue Shares in a Company
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• Corporate Stock Transfer Agreement

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The Risks of Options Assignment

Any trader holding a short option position should understand the risks of early assignment. An early assignment occurs when a trader is forced to buy or sell stock when the short option is exercised by the long option holder. Understanding how assignment works can help a trader take steps to reduce their potential losses.

Understanding the basics of assignment

An option gives the owner the right but not the obligation to buy or sell stock at a set price. An assignment forces the short options seller to take action. Here are the main actions that can result from an assignment notice:

• Short call assignment: The option seller must sell shares of the underlying stock at the strike price.
• Short put assignment: The option seller must buy shares of the underlying stock at the strike price.

For traders with long options positions, it's possible to choose to exercise the option, buying or selling according to the contract before it expires. With a long call exercise, shares of the underlying stock are bought at the strike price while a long put exercise results in selling shares of the underlying stock at the strike price.

When a trader might get assigned

There are two components to the price of an option: intrinsic 1 and extrinsic 2  value. In the case of exercising an in-the-money 3 (ITM) long call, a trader would buy the stock at the strike price, which is lower than its prevailing price. In the case of a long put that isn't being used as a hedge for a long stock position, the trader shorts the stock for a price higher than its prevailing price. A trader only captures an ITM option's intrinsic value if they sell the stock (after exercising a long call) or buy the stock (after exercising a long put) immediately upon exercise.

Without taking these actions, a trader takes on the risks associated with holding a long or short stock position. The question of whether a short option might be assigned depends on if there's a perceived benefit to a trader exercising a long option that another trader has short. One way to attempt to gauge if an option could be potentially assigned is to consider the associated dividend. An options seller might be more likely to get assigned on a short call for an upcoming ex-dividend if its time value is less than the dividend. It's more likely to get assigned holding a short put if the time value has mostly decayed or if the put is deep ITM and close to expiration with a wide bid/ask spread on the stock.

It's possible to view this information on the Trade page of the thinkorswim ® trading platform. Review past dividends, the price of the short call, and the price of the put at the call's strike price. While past performance cannot be relied upon to continue, this information can help a trader determine whether assignment is more or less likely.

Reducing the risk associated with assignment

If a trader has a covered call that's ITM and it's assigned, the trader will deliver the long stock out of their account to cover the assignment.

A trader with a call vertical spread 4 where both options are ITM and the ex-dividend date is approaching may want to exercise the long option component before the ex-dividend date to have long stock to deliver against the potential assignment of the short call. The trader could also close the ITM call vertical spread before the ex-dividend date. It might be cheaper to pay the fees to close the trade.

Another scenario is a call vertical spread where the ITM option is short and the out-of-the-money (OTM) option is long. In this case, the trader may consider closing the position or rolling it to a further expiration before the ex-dividend date. This move can possibly help the trader avoid having short stock on the ex-dividend date and being liable for the dividend.

Depending on the situation, a trader long an ITM call might decide it's better to close the trade ahead of the ex-dividend date. On the ex-dividend date, the price of the stock drops by the amount of the dividend. The drop in the stock price offsets what a trader would've earned on the dividend and there would still be fees on top of the price of the put.

Assess the risk

When an option is converted to stock through exercise or assignment, the position's risk profile changes. This change could increase the margin requirements, or subject a trader to a margin call, 5 or both. This can happen at or before expiration during early assignment. The exercise of a long option position can be more likely to trigger a margin call since naked short option trades typically carry substantial margin requirements.

Even with early exercise, a trader can still be assigned on a short option any time prior to the option's expiration.

1  The intrinsic value of an options contract is determined based on whether it's in the money if it were to be exercised immediately. It is a measure of the strike price as compared to the underlying security's market price. For a call option, the strike price should be lower than the underlying's market price to have intrinsic value. For a put option the strike price should be higher than underlying's market price to have intrinsic value.

2  The extrinsic value of an options contract is determined by factors other than the price of the underlying security, such as the dividend rate of the underlying, time remaining on the contract, and the volatility of the underlying. Sometimes it's referred to as the time value or premium value.

3  Describes an option with intrinsic value (not just time value). A call option is in the money (ITM) if the underlying asset's price is above the strike price. A put option is ITM if the underlying asset's price is below the strike price. For calls, it's any strike lower than the price of the underlying asset. For puts, it's any strike that's higher.

4  The simultaneous purchase of one call option and sale of another call option at a different strike price, in the same underlying, in the same expiration month.

5  A margin call is issued when the account value drops below the maintenance requirements on a security or securities due to a drop in the market value of a security or when buying power is exceeded. Margin calls may be met by depositing funds, selling stock, or depositing securities. A broker may forcibly liquidate all or part of the account without prior notice, regardless of intent to satisfy a margin call, in the interests of both parties.

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Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the options disclosure document titled  Characteristics and Risks of Standardized Options before considering any options transaction. Supporting documentation for any claims or statistical information is available upon request.

With long options, investors may lose 100% of funds invested.

Spread trading must be done in a margin account.

Multiple leg options strategies will involve multiple commissions.

Commissions, taxes and transaction costs are not included in this discussion, but can affect final outcome and should be considered. Please contact a tax advisor for the tax implications involved in these strategies.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

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The Bottom Line

New york stock exchange (nyse): definition, how it works, history.

What Is the New York Stock Exchange (NYSE)?

The New York Stock Exchange (NYSE) is a stock exchange located in New York City that is the largest equities -based exchange in the world, based on the total market capitalization of its listed securities.

Formerly run as a private organization, the NYSE became a public entity on March 8, 2006, following the acquisition of electronic trading exchange Archipelago . In 2007, a merger with Euronext —the largest stock exchange in Europe—led to the creation of NYSE Euronext, which was later acquired by Intercontinental Exchange, Inc. ( ICE ), the current parent of the New York Stock Exchange.

Key Takeaways

• The New York Stock Exchange (NYSE), which dates back to 1792, is the largest stock exchange in the world based on the total market capitalization of its listed securities.
• It was the first formalized stock exchange established in the United States.
• Many of the oldest publicly traded U.S. companies are listed on the "Big Board," the nickname for the NYSE.
• The Intercontinental Exchange (ICE) now owns the NYSE, having purchased the exchange in 2013.

Understanding the New York Stock Exchange (NYSE)

Located on Wall Street in New York City, the New York Stock Exchange —also known as the " Big Board "— consists of one trading floor for equities and another for the NYSE American options exchange. The main building located at 18 Broad St. and the one at 11 Wall St. were both designated historical landmarks in 1978.

The NYSE relied for many years on floor trading only, using the open outcry system. Many NYSE trades have transitioned to electronic systems relying mainly on designated market makers to conduct both the physical and automated auctions. Quotes offered by DMMs are on par with what floor traders and other market participants offer.

Currently, the NYSE is open for trading Monday through Friday from 9:30 a.m. to 4:00 p.m. ET. The stock exchange is closed on certain U.S. holidays. When these fall on a Saturday, the NYSE is sometimes closed the preceding Friday. When holidays fall on a Sunday, the NYSE may be closed the following Monday.

The NYSE is the world's largest stock exchange by total market capitalization of listed companies , which is estimated to be $24.6 trillion as of Mid-2022.

The NYSE's Opening and Closing Bells

The opening and closing bells of the exchange mark the beginning and end of the trading day. The opening bell is rung at 9:30 a.m. ET, and the closing bell is rung at 4:00 p.m. ET, closing trading for the day. But trading days did not always begin and end with a bell—the original signal was actually a gavel. During the late 1800s, the NYSE changed the gavel to a gong. The bell became the official signal for the exchange in 1903 when the NYSE moved to 18 Broad St.

Prior to 1995, the exchange's floor managers rang the bells. But the NYSE began inviting company executives to ring the opening and closing bells on a regular basis, which later became a daily event. The executives are from companies listed on the exchange, who sometimes coordinate their appearances with marketing events, such as the launch of a new product or innovation, or a merger or acquisition .

Sometimes, other public figures, such as athletes and celebrities, ring the bell. Some of the more notable figures to ring it include singer/actor Liza Minnelli, Olympic medalist Michael Phelps, and rapper Snoop Dogg. In July 2013, United Nations Secretary Ban Ki-moon rang the closing bell to mark the NYSE joining the U.N. Sustainable Stock Exchanges Initiative.  

The New York Stock Exchange passed the milestone of one million shares traded in a single day in 1888. By 2022, more than five billion shares were changing hands on the NYSE during a normal business day.

History of the NYSE

The New York Stock Exchange dates back to May 17, 1792. On that day, 24 stockbrokers from New York City signed the Buttonwood Agreement at 68 Wall St. The New York Stock Exchange kicked off with five securities, which included three government bonds and two bank stocks.

Thanks to the NYSE's head start as the major U.S. stock exchange, many of the oldest publicly traded companies are on the exchange. Consolidated Edison ( ED ) is the longest-listed NYSE stock, joining in 1824 as the New York Gas Light Company. Along with American stocks, foreign-based corporations can also list their shares on the NYSE if they adhere to certain listing standards.

A series of mergers has given the New York Stock Exchange its massive size and global presence. The company started as NYSE before merging with the Euronext and adding the American Stock Exchange. NYSE Euronext was purchased in an $11 billion deal by the Intercontinental Exchange (ICE) in 2013. The following year, Euronext emerged from ICE via an initial public offering (IPO), but ICE retained ownership of the NYSE.

A Few Notable Dates in the NYSE’s History

• Oct. 24, 1929: The most devastating stock market crash in the history of the U.S. began on Black Thursday and continued into a sell-off panic on Black Tuesday, Oct. 29. It followed the crash of the London Stock Exchange, which took place in September and signaled the onset of the Great Depression , which affected all of the industrialized countries in the West.  
• Oct. 1, 1934: The NYSE registered as a national securities exchange with the SEC.
• Oct. 19, 1987: The Dow Jones Industrial Average (DJIA) dropped 508 points or a loss of 22.6% in a single day.
• Sept. 11, 2001: Trading was shut down for four days at the NYSE following the 9/11 attacks and resumed on Sept. 17. About $1.4 trillion was lost in the five days of trading following the reopening—the biggest losses in NYSE history.
• October 2008: NYSE Euronext completed the acquisition of the American Stock Exchange for $260 million in stock.
• May 6, 2010: The DJIA suffered its largest intraday drop since the crash of Oct. 19, 1987. It dropped 998 points in what is known as the 2010 Flash Crash .
• Dec. 20, 2012: ICE proposed to buy NYSE Euronext in a stock swap worth $8 billion.
• May 1, 2014: The NYSE was fined $4.5 million by the Securities and Exchange Commission in order to settle charges of market rule violations.
• May 25, 2018: Stacey Cunningham became the first female president of the NYSE.
• March 16, 2020: The onset of COVID-19 pandemic fears led to the DJIA suffering its largest daily point drop in history as it fell 2,997.10 points from the previous close. Percentage-wise, it was the third worst day ever.
• March 23, 2020: The NYSE temporarily closed floor trading due to the COVID-19 pandemic , opting to continue its operations electronically.
• March 24, 2020: The DJIA recorded its largest one-day point gain on expectation of a stimulus relief bill . Percentage-wise, it was the fifth best day ever.

Who Owns the New York Stock Exchange?

The NYSE was acquired by the Intercontinental Exchange (ICE) group in 2013.

Where Is the Oldest Stock Exchange in the World?

The Amsterdam Stock Exchange (AEX) in the Netherlands is the oldest stock exchange, established in 1602 by the Dutch East India Company. Today the Amsterdam exchange is owned by Euronext .

What Is the Largest Stock Exchange in the World?

The New York Stock Exchange (NYSE) remains the largest stock exchange in the world in terms of the market capitalization of the companies listed on it. The NASDAQ ranked second, followed by the Shanghai Stock Exchange , and the Euronext.

The New York Stock Exchange (NYSE) is the oldest and most influential securities exchange in the United States, and is the largest stock exchange in the world by total listed company market cap. With humble beginnings under a buttonwood tree in Manhattan, the NYSE is now a landmark that epitomizes Wall Street. Today, the NYSE lists the most important publicly-traded American companies and is still seen as the premier venue for stock trading.

NYSE Group. " New York Stock Exchange/Archipelago Holdings Merger Complete ."

Intercontinental Exchange. " IntercontinentalExchange to Acquire NYSE Euronext For $33.12 Per Share in Stock and Cash, Creating Premier Global Market Operator ."

National Park Service. " New York Stock Exchange ."

New York Stock Exchange. " Holidays & Trading Hours ."

Statista. " Largest Stock Exchange Operators Worldwide by Market Capitalization of Listed Companies ."

New York Stock Exchange. " About the NYSE Bell ."

United Nations News. " Ban rings Wall Street closing bell, welcomes NY Stock Exchange to UN initiative ."

New York Stock Exchange. " Daily U.S Equity Matched Volumes ."

Library of Congress. " Wall Street and the Stock Exchanges: Historical Resources ."

New York Stock Exchange. " Facebook Post - May 16, 2017 ."

New York Stock Exchange. " Overview of NYSE Quantitative Initial Listing Standards ," Pages 1-3.

NYSE Euronext. " NYSE Euronext to Acquire the American Stock Exchange ."

Intercontinental Exchange. " IntercontinentalExchange Completes Acquisition of NYSE Euronext ."

Intercontinental Exchange. " Intercontinental Exchange Announces Closing of Euronext Initial Public Offering ."

Library of Congress. " Black Monday Stock Market Crash ."

Federal Reserve Bank of St. Louis. " Stock Market Crash of 1987 ."

U.S. Securities and Exchange Commission. " Findings Regarding the Market Events of May 6, 2010 ," Page 1.

U.S. Securities and Exchange Commission. " SEC Charges NYSE, NYSE ARCA, and NYSE MKT for Repeated Failures to Operate in Accordance With Exchange Rules ."

Intercontinental Exchange. " Intercontinental Exchange Names Stacey Cunningham as New President of NYSE Group ."

CNBC. " Dow Drops Nearly 3,000 Points, as Coronavirus Collapse Continues; Worst Day Since ’87 ."

Intercontinental Exchange. " New York Stock Exchange to Move Temporarily to Fully Electronic Trading ."

CNBC. " Stock Market Live Tuesday: Dow Soars 2,100 Points, Biggest Jump in 80 Years, Stimulus Close ."

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Stock Market

Stock Market teaches students all about the stock exchange, the bull and bear markets, and what shares are. Students will discover how the stock market started in May of 1792. They will learn about the Buttonwood Agreement and about commissions. The Buttonwood Agreement led to what is now called the New York Stock Exchange (NYSE).

By the end of this lesson, students will be able to identify and define many of the terms associated with stocks. They will a basic understanding of how the market works and how to make money with investing. There are several suggestions in the “Options for Lesson” section that may aid in your instruction. For instance, you may invite a stock broker to speak with the class and provide additional information.

Description

Additional information, what our stock market lesson plan includes.

Lesson Objectives and Overview: Stock Market is a great lesson for 5th and 6th grade students. Your students will learn all about the stock exchange and related terms. They have likely heard of the stock market, but they may not fully understand it. Students will learn about buying, investing, selling, and trading. And they will even have the chance to simulate the stock exchange and purchase and trade stock.

Classroom Procedure

Every lesson plan provides you with a classroom procedure page that outlines a step-by-step guide to follow. You do not have to follow the guide exactly. The guide helps you organize the lesson and details when to hand out worksheets. It also lists information in the yellow box that you might find useful. You will find the lesson objectives, state standards, and number of class sessions the lesson should take to complete in this area. In addition, it describes the supplies you will need as well as what and how you need to prepare beforehand.

Options for Lesson

You can check out the “Options for Lesson” section of the classroom procedure page for additional suggestions for ideas and activities to incorporate into the lesson. Students may work alone or in groups for the activity. You could also increase or decrease the length of time for the activity. Have students create an imaginary company and give other students a set amount of money to invest in the imaginary companies. Then discuss how students decided on the investments. Invite a stock broker or another financial expert to speak with the class about the stock market, investing, etc. Assign each student a company of which they can research the stock value from the company’s founding up to the present day.

Teacher Notes

The teacher notes page provides an extra paragraph of information to help guide the lesson and remind you what to focus on. While students may have heard about the stock market, they may not really understand what it involves. This lesson is meant to provide a foundational understanding. You might also benefit from teaching this lesson in conjunction with others about money or the economy. The blank lines on this page are available for you to write out thoughts and ideas you have as you prepare the lesson.

STOCK MARKET LESSON PLAN CONTENT PAGES

Introduction to the stock market.

The Stock Market lesson plan contains four pages of content. The word stock simply refers to the supply of a product or maybe a service. And the market is usually a public place where people can buy, sell, or trade those products or services. However, in a financial market, the stock refers to the supply of money that a company has raised. The money comes from people who gave the company money in the hopes that the company will make a profit. In return, the people who gave the money will earn more money.

Stock market , then, is the business of buying and selling stock. It is not a place like a grocery store or a food market. Wall Street is the name of a street in New York City’s financial district, and sometimes we say “Wall Street” to refer to the United States stock market. The financial district is the place where many people (or computers) buy and sell stock for themselves and other people.

The first stock market began on May 17, 1792, when 24 stockbrokers (people who buy and sell stock) and merchants signed the Buttonwood Agreement. This agreement had two provisions. First, the brokers were only to deal with each when buying or selling stock. And second, commissions (the money brokers made on each sale) were to be 0.25%. The agreement was signed underneath a buttonwood tree.

Later, the agreement led to the formation of the New York Stock and Exchange Board. This is now the New York Stock Exchange (NYSE), which is a company on Wall Street. It is also the world’s largest stock exchange. It provides a means for buyers and sellers to trade shares of stock in companies registered for public trading. There are other stock exchanges throughout the world as well, such as the London Stock Exchange (LSE) and another American exchange called the NASDAQ (National Association of Securities Dealers Automated Quotations) Stock Market.

Using the stock exchanges brokers, people and businesses can invest their money in public companies throughout the world. The public companies often want to grow their business, build more factories, or develop new products. So they turn to the selling of stocks to raise money for the company.

How Stocks Work

The next page outlines how the stock market functions. A company could borrow money from a bank to grow their business, but they would have to pay the money back to the bank. However, instead of borrowing money, a company can issue stock and raise money without going into debt. The people who buy the stock give money to the company to help the business grow.

In some way, you can think of it as opening a lemonade stand. After you open, you realize you don’t have enough money for all the supplies. You ask your parents for some money to help pay for lemons, cups, signage and other supplies. They give you the money, and you start selling. Once you begin making a profit, you pay them back and give them some of your profits. However, if you lose money, your parents will lose their money too. It is a risk they took to help you build your lemonade business.

Only business corporations can issue stock. A business owned by one person (sole-proprietorship) or a few people (partnership) cannot. A corporation has a special legal status and does not depend on the people who run it. And it has legal rights and responsibilities to the people who buy the company’s stock.

Shareholders and Stockholders

People who buy stock in a company own part of the company. Each part they own is called a share. For example, let’s go back to the lemonade stand. If you sold 100 shares of stock in your company at $1.00 per share, a person who purchased one share would own 1% of the company. A person who had 25 shares would own 25% of the company. The people who own the stock are called stockholders or shareholders.

The shareholders usually have voting rights in a company too. They could vote in people for the board of directors, for instance. The board will run the company and make major decisions for the company’s success. Stockholders usually have one vote for each share of stock they own. That means that the more stock a person owns, the greater influence they may have on the company. Quarterly or yearly reports are also sent to stockholders to inform them how the company is doing.

Every stockholder wants the company to grow and earn a profit. If the company earns money, the stockholders share the profits after the expenses are paid. Usually, when people invest money in companies by purchasing stock, they will earn more than they would if they left the money in the bank or made other investments.

For example, if the lemonade stand made a profit of $100, the people who purchased shares of the stock would double their money and earn a 100% profit. Banks and other investments usually yield much less. Of course, not all stocks earn such a high rate of return. But over time, investing in and buying shares of stock in a company usually leads to a greater profit.

On the other hand, if a company does poorly, goes out of business, and loses money, a stockholder can lose the money they invested in the company. The prices of stock for a company, though, will usually rise and fall over time. For example, a share of stock in a company today might cost $23, but tomorrow it could be worth $25 and the next day drop to $22. The rise and fall of stock prices drive people to “play” the stock market for a living.

Playing the Stock Market

There are people who play the stock market by buying and selling stock at the right time to earn money. For example, if the price of a stock goes down, a broker may purchase the stock at the lower price. They hold it for a while until the value of the stock rises or goes up and then sell it. If they can do this, they earn a profit simply by buying and selling stock at the right time.

For example, your lemonade stand stock may be worth $1 a share in the beginning but go up to $1.25 per share. The people who originally invested can now sell their shares for 25 cents profit per share to someone who is willing to buy the stock. The value of the stock could go down, however, and shareholders could lose money.

Students will learn that stock prices fluctuate daily and weekly. People will often hold onto a stock for a much longer period of time. The price of the share will change often, but over a long period of time, the value of stocks often rises. In summary, if a company does well, the value of shares rises. If a company struggles, the value of shares will go down.

Investors and brokers are often the people who follow the stock market very closely and invest another person’s or company’s money. They follow the overall rise and fall of the stock market and watch closely for companies that may increase in value and those that may decrease in value. At the end of each day, the market determines the overall value of  stock shares that companies, brokers, and investors bought or sold, or traded. The stock market value is then reported as going “up” or “down.”

There are stock markets throughout the world, and investors will carefully watch what happens to the value of stocks in other countries too. Sometimes this helps them make choices as to whether they should buy or sell shares of stock throughout the day.

Bears and Bulls

There are two groups of investors—bears and bulls. A bear is an investor who believes the stock market will go down and will be cautious when buying stock. A bull is an investor who believes the stock market will go up and put more money into buying shares of stock. Investors can also be bearish or bullish about a single kind of stock. The term bear market describes a time when stock prices are falling. Naturally, then, a bull market is a period of rising stock prices. Bear markets are usually bad; bull markets are good.

Without stocks (the shares of value in a company), many businesses would not have the money to grow and develop their products or services. The idea of a stock market has been around for a long time. In fact, people purchased stocks to finance the Pilgrim’s voyage to America. They hoped the travelers would find something valuable in the New World, ensuring the investors made a profit.

For example, imagine that friends you know want to search for gold reportedly buried in the side of a mountain. Your friends might need money to purchase equipment and tools. You give them the money hoping the gold will be found. If it is, they have agreed to give you a certain percentage of the profit.

STOCK MARKET LESSON PLAN WORKSHEETS

The Stock Market lesson plan includes three worksheets: an activity worksheet, a practice worksheet, and a homework assignment. Each one will reinforce students’ comprehension of lesson material in different ways and help them demonstrate when they learned. Use the guidelines on the classroom procedure page to determine when to distribute each worksheet to the class.

PURCHASE SHARES ACTIVITY WORKSHEET

After dividing into pairs, students will purchase shares of five different stocks. They will have an imaginary $5000 to allocate among the stocks. They will track the rising and falling prices of the stocks over a period of time. The lesson states two weeks. However, you could provide real companies for the students to monitor and adjust the amount of time they will track the prices.

At the beginning of the activity, students will answer a set of questions. After the two weeks pass, they will answer another set of questions based on their experience.

DEFINITION MATCH PRACTICE WORKSHEET

The practice worksheet lists 15 statements. Students will match the definition to the correct term. Afterward, they will answer five other questions, most of which are based on the lesson material.

STOCK MARKET HOMEWORK ASSIGNMENT

For the homework assignment, students must first fill in the blanks to 10 questions using the words in the word bank. Afterward, there is another set of statements. Students will determine whether the statement is true or false and mark it appropriately.

Worksheet Answer Keys

There are answer keys for both the practice and homework worksheets at the end of the lesson plan document. Correct answers are in red to make it easy for you to compare them to students’ work. If you choose to administer the lesson pages to your students via PDF, you will need to save a new file that omits these pages. Otherwise, you can simply print out the applicable pages and keep these as reference for yourself when grading assignments.

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Creating and Managing Assignments

What are Assignments?

An Assignment is a list of tasks you can give your students to complete using their virtual portfolio. 

Each Assignment has its own start dates and due dates – you can have one long assignment lasting the entire trading session, or give students smaller assignments week by week.

Types of Tasks

There are three types of tasks you can assign:

• Watching tutorial videos demonstrating how to use the StockTrak.com website and research tools.
• Reading educational articles about investing, personal finance, and career development.
• Making certain types of trades.

Tutorial Videos

There are over a dozen tutorial videos available on the StockTrak Video Center . These include:

• Site Navigation : walkthrough of the website, and the portfolio pages and how they work.
• Security Type Tutorials : walkthrough for each security type, showing how they are traded and what makes them unique compared to each other.
• Order Type Tutorials: walkthroughs for limit, stop, and trailing stop orders, along with how to best utilize different order terms.
• Research Tutorial : walkthrough of using the integrated StockTrak research tools.

Including a Tutorial Video in your assignment will require your student to watch that video to get credit. Including an assignment with tutorial videos can greatly speed up how quickly students get familiarized with their portfolios.

Reading Articles

The StockTrak Learning Library has hundreds of articles about investing, personal finance, and career development. You can assign these articles as Required Reading for your class as part of an assignment.

If you assign an article, students will need to read the article and answer a short quiz at the end to get credit.

You can choose whether students can retake the pop quizzes to get a better score. You’ll be able to track the number of attempts and how long students spend on each lesson.

Making Trades

Finally, you can also require your students to make certain types of trades in their StockTrak portfolio. This can be something basic, like placing 10 total trades, or more specific, like using 3 Trailing Stop orders or trading 3 stocks from the Toronto Stock Exchange.

Getting Started With Assignments

Once your class is set-up, you can manage your assignments from the Admin menu. Create a new assignment, or you can view/edit your existing ones from here.

Click Create a New Assignment to go to the Create Assignment page.

Copy an Older Assignment

If you’ve used StockTrak before, you can reuse older assignments by clicking the button Copy Older Assignment . You will still need to set the dates and assignment name after copying over your previous selection of lessons and tasks.

Task Selection

You can either select individual tasks by checking the box in front of the lesson/task name, or a whole section by clicking Select All Tasks. Similarly, allow your students to redo the pop quiz to get a better grade by checking the boxes under Select All Retries .

Click the View button to see what’s included in the lesson. The time estimations will give you a rough idea of how long it will take your students to complete each one.

Where to Start

We recommend that every class include the Stock Game – Beginner Lessons as the first assignment. This is a selection of lessons covering basic glossary terms your students will need to know, along with tutorial videos walking them through the different resources available, and how to place their first trade.

If you’re using StockTrak as part of a Personal Finance class, there are 60 articles and activities covering Personal Finance topics like budgeting, insurance, credit, and debt.

If you are using StockTrak as part of an Investments, Portfolio Management, or Derivatives class, you will have additional articles, videos, and trading tasks focusing on options and derivatives trading.

There is also our 10-chapter Investing 101 Beginner’s Investing Course. This is a self-contained investing e-book of 100 investing topics designed for novice students taking part in department-wide or campus-wide investing challenges. Each chapter ends with a vocabulary quiz and chapter exam that can be assigned individually or altogether.

Create Assignment

Once you’ve selected all the items you want to include in this assignment, click Create Assignment towards the top of the page. You can edit your lesson at any time from the Edit Assignment page.

Assignment Report Card

View student progress and grades by either switching to the Report Card option from the drowdown menu at the top of the page. Or you can use the Reports menu and click Assignment Student Progress Report .

The report card will list all the students in your class, along with their current progress in each assignment. Click View assignment Details to see more information about how long they’ve taken to complete the lesson, their quiz attempts and grades.

Student Dashboard

When students log into their account, the top widget on their dashboard will list all of their assignments. By clicking Show Tasks they’ll be able to see the individual lessons in your assignment.

To view the Student Dashboard, click Switch to User Dashboard from the top of the Admin Dashboard.

Stock Exchange Project Class 12

Table of Contents

INTRODUCTION TO STOCKS

A stock exchange , securities exchange, or bourse is a facility where stock brokers and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments. Stock exchanges may also provide for facilities the issue and redemption of such securities and instruments and capital events including the payment of income and dividends. The best way to let students learn is a stock exchange project class 12.

To be able to trade a security or a certain stock exchange, the securities must be listed there. Trade on a stock exchange is restricted to Brokers who exchange. In recent years, various other trading venues, such as electronic communication networks.

HISTORY OF STOCK EXCHANGE

The first stock exchange was officially formed in London in 1773, a scant 19 years before the New York Stock exchange. Whereas the Law Restricting shares handcuffed the London Stock Exchange (LSE), the NYSE has dealt in the trading of stocks, for better or worse, since its inception. The NYSE wasn’t the first stock exchange in the U.S. however, that honour goes to the Philadelphia Stock Exchange, but it quickly became the most powerful. Formed by Brokers under the spreading boughs of a buttonwood tree, NYSE made its home on wall street. It was in the heart of all the business and trade coming to and going from the United States, as well as the domestic base for most banks and large corporations.

INDIAN STOCK EXCHANGE

Indian Stock Exchanges may refer to the 18 official stock exchanges located in India, the largest of which are NSE and BSE. All of them are as follows: –

• Bombay Stock Exchange (BSE) → Mumbai
• National Stock Exchange (NSE) → Mumbai
• Calcutta Stock Exchange (CSE) → Kolkata
• Cochin Stock Exchange → Kochi
• Interconnected Stock Exchange of India
• Multicommodity Stock Exchange
• OTC Exchange of India
• Pune Stock Exchange → Pune
• National commodity and derivatives Exchange
• P Stock Exchange
• Vadodara Stock Exchange
• Coimbatore Stock Exchange
• Madras Stock Exchange
• Meerut Stock Exchange
• Ahmedabad Stock Exchange
• Delhi Stock Exchange
• Hyderabad Stock Exchange
• Bangalore Stock Exchange

NATIONAL STOCK EXCHANGE

The National Stock Exchange of India Limited (NSE) is the leading stock exchange in India, located in Mumbai. It is established in 1992 as the first demutualized electronic exchange in India, and so it was the first exchange to provide a modern, fully-automated system. Vikram Limaye is M.D and CEO NSE.

NSE has a total market capitalization of more than US $2.7 trillion, making it the world’s 11 th largest stock exchange as of April 2018. NSE’s flagship index, NIFTY 50, the 50 stock index, is used extensively by investors in India and around the world as a barometer of Indian Capital Markets. Nifty Fifty Index was launched in 1996 by the NSE.

The stock trading at the BSE and NSE accounts for only around 4% of the Indian Economy, which derives most of its income-related activity from the so-called underdeveloped sector and households.

BOMBAY STOCK EXCHANGE

The Bombay Stock Exchange (BSE) is an Indian Stock Exchange located at Dalal street Mumbai. Established in 1875, the BSE is Asia’s first stock exchange. It claims to be the world’s fastest stock exchange, with a median trade speed of 6 micro-seconds. It is also the world’s 10th largest stock exchange, with an overall market capitalization of more than $2.3 trillion as of April 2018.

Premchand Roychand founded the Bombay Stock Exchange. He was one of the most influential businesses in the 19 th century. A man who made a fortune in the stockbroking business and came to be known as the Cotton King, the Bullion King, or just the Big Bull.

STOCK MARKET TIMINGS IN INDIA

Normal trading session:.

• This is the actual time when most of the trading takes place.
• Its duration is between 9:15 AM to 3:30 pm.
• You can buy and sell stocks in this session.
• It follows a bilateral trading session, i.e., Whenever buying price is equal to the selling price; then the transaction is complete

Pre-Opening Session:

The duration is between 9:00 AM to 9:15 Am. This is further sub-divided into three sub-sessions:

• 9:00 AM to 9:08 AM : – This is the order entry session. You can place an order to buy and sell stocks during this duration.
• 9:08 AM to 9:12 AM: – This session is used to order matching and calculating the order price of the normal session.
• 9:12 AM to 9:15 AM : – This session is used as a buffer speed. It is used for the smooth translation of the pre-project session to the normal session.
• The time between 3:30 pm to 3:40 pm is used for closing price Calculation
• The closing price of a stock is the weighted average of the prices between 3:00 PM to 3:30 PM.
•  For the indexes like Sensex & nifty, it’s the closing price is a time-weighted average of the constituent stocks for the last 30 mins, i.e., between 3 pm to 3:30 pm.

Post Closing Session

• The duration of the post-closing session is between 3:40 pm to 4:00 PM
• You can buy or sell stocks in the post-closing session at the closing price.

ROLE OF STOCK EXCHANGE

Stock exchange, apart from being the hub of the primary and secondary market, has a very important role to play in the economy of the country.

some of them are listed below:

• Raising capital for businesses

Exchanges help companies to capitalize by selling shares to the investing public.

• Mobilizing savings for investment

They help the public to mobilize their savings to invest in high yielding economic sectors.

• Facilitating company growth

They help companies to expand and grow by acquisition or fusion.

• Profit-Sharing

They help both casual and professional stock investors, to get a share in the wealth of profitability businesses.

• Cooperate governance

Stock exchanges improve stringent rules to get listed in them.

• Creating investment opportunities for small investors

Small investors can also participate in the growth of large companies.

• The government in Capital raises for development projects

They help govt to rise for development activities through the issue of bonds.

• Barometer of the Economy

They maintain the stock indexes, which are indicators of the general trend.

STOCK MARKET TERMINOLOGY

• Ask  The price that a seller is willing to ask for a share of Stock.
• Back Testing : Applying the strategy to historical data to see if it is valid.
• Bear Market : A period of declining stock value, usually accompanied by investor pessimism.
• Block Trade : Buying or selling a large project, confidentially, it.
• Blue Chip : A established co. with a national or international reputation for stability, profitability, and value
• Blue Market : A period of rising stock value, usually accompanied by investor optimism in it.
• Bid : Price that a buyer is willing to pay for a share of stock.
• Close: The price of the stock at the end of the trading day.
• Dividend: A payment made of companies’ profits to their shareholders.
• Earnings per share (EPS): The Companies’ profit divided by the average number of outstanding shares.
• Electronic Communication Network (ECN): a Computer system that facilitates stock trading outside of a stock exchange.
• Fill or kill (Fok): – when you want all of your orders filled immediately or none at all.
• Fundamental Analysis: – Examining the financial health and strength of a company to determine its Share price, future value, and earning expectations.
• Hedge: – Limiting your classes or reducing risk by placing orders to cover two or more possible events in the market.
• Initial Public offering: When the first-time company issues its shares in public on an exchange.
• Limit Order: When you want to buy or sell a stock at a specific price or better.
• Liquidity: Being able to sell or buy shares in a stock w/o the transaction seriously affecting the stock’s price.
• Margin: Borrowing money to trade for more than what you have in your account.
• Volume: The amount of a share being traded at a given point in time.

In the 1980s, huge malpractices and frauds were emerging in the stock market of India. This was due to the huge sudden cash flow in the market.

Everyone wanted to get rich very quickly by finding loopholes in the system. The most prominent of those frauds was price rigging. The Union government of India noticed a decrease in figures and decided to form an organization, which can help recover the decrease in the financial market in India. SEBI was established in 1988. The primary role at that time was to observe the market, but SEBI had no power to control anything. It was a non-statutory body. To give it powers, the union govt of India passes the SEBI act 1992.

ORGANISATIONAL STRUCTURE OF SEBI

• There are main nine members on the SEBI Board
• One Chairman appointed by Govt. of India.
• Two members are officers from the union finance ministry.
• One number from RBI.
• Five members are appointed by the Union Govt of India, where three are whole-time members.

OBJECTIVES of SEBI

• To provide a transparent and healthy platform for corporates to raise funds from the financial market.
• To create and enforce bye-laws for corporations and financial intermediaries.
• To protect the right of investors and ensure the safety of their investment.
• Listen and provide a support system for investor grievances.
• Promote and Develop the financial market of India.

ROLE OF SEBI

SEBI was established to regulate the financial market of India. To achieve this objective, it takes care of the three most important entities of the financial Market, i.e.

• Issuers Of Securities

These are corporate entities that raise funds from the financial market. SEBI ensures that they get a transparent and healthy environment for their needs.

These are the ones who keep the financial market alive. They earn from those markets; thus, it is the responsibility of SEBI to ensure that investors don’t prey on any manipulation or fraud in the market.

• Financial Intermediaries

These intermediaries act as a mediator in the financial market. Their presence brings smoothness and safety to financial institutions.

FUNCTIONS OF SEBI

• Protective Functions

As protective functions, SEBI performs the following functions:

• SEBI checks price rigging
• SEBI prohibits insider trading
• SEBI prohibit fraudulent activities and unfair trade practices
• SEBI sometimes educate the investors so that it becomes able to evaluate the Securities and always invest in profitable securities.
• SEBI issues guidelines to protect the interest of debenture holders
• SEBI is empowered to investigate cases of insider trading and has provisions for stiff fines and imprisonment
• SEBI has stopped the practice of allotment of preferential shares unrelated to market issues.
• Development Functions
• SEBI promotes the trading of intermediaries of the Securities Market
• SEBI tries to promote activities of the stock exchange by adopting a flexible and adaptable approach in the following way:
• SEBI has permitted internet trading through registered Stockbrokers.
• SEBI has made underwriting optional to reduce the cost of the issue. An even initial public offer of the primary market is permitted through the stock exchange.
• Regulatory Functions
• SEBI has framed sucks and regulations and a code to regulate the intermediaries.
• These intermediaries have been brought under the regulatory purview, and private placement has been made more restrictive.
• SEBI registers and regulates the working of Stockbrokers, sub, brokers, share transfer agents, trusties, merchant bankers, and all those who are associated with the stock exchange in many manners.
• SEBI registers and regulates the working of mutual funds, etc.
• SEBI regulates the takeover of the company (ies).
• SEBI conducts audits and inquiries of the stock exchange.

Top 25 LISTED COMPANIES

Trading procedure.

Step 1: Selection Of A Broker

The first step is to select a Broker who will buy or sell securities on behalf of the investors. This is necessary because trading of securities can only be done through SEBI’s registered brokers, who are members of the stock exchange.

Step-2: Opening Demat A/c With Depository

The next step is to open a Demat account. A Demat account refers to an account in which an Indian citizen must open with the depository participant to trade in listed securities in electronic form.

Step-3: Placing The Order

The next step is to place the order with the broker. The order can be communicated to the broker either personally or electronically.

Step-4: Executing The Order

According to the instructions of the investor, the broker buys or sells securities. The broker then issues a contract note. A copy of the contract note contains the name and the price of securities, brokerage charges, etc.

Step-5: Settlement

This is the last stage in the trading of securities done by the brokers on behalf of their clients.

The mode of settlement depends upon the contract. Equity spot market a T + 2 rolling settlement. Each exchange has its clearinghouse, which assumes all settlement risk.

An investment portfolio is a collection of assets owned by an individual or by an institution. An investor’s portfolio includes real estate and so-called ‘hard’ assets, such as a gold ban.

Imaginary Portfolio

Imaginary portfolio totalling a sum of approximately Rs. 50,000 in an of the five companies listed above.

TOTAL SHARES – 96

TOTAL AMOUNT INVESTED OUT

OF Rs. 50.000; 49878

State Bank of India (SBI) is an Indian, multi-national, public sector banking and financial services company.

It is government-owned cooperation headquartered in Mumbai, Maharashtra. The company is ranked 217 th on the Fortune Global 500 list of the world’s biggest corporations as of 2017. It is the largest bank in India with a 23% market share in assets, besides a share of ¼ th of the total loan and deposits market.

The Bank descends from the Bank of Calcutta, founded in 1806, via the Imperial Bank of India, making it the oldest commercial bank in the Indian subcontinent, and it turns into SBI in the year 1955.

ITC Limited or ITC is an Indian based company, originally based in Kolkata, West Bengal. Its diversified business includes five segments: Fast Moving Manufactured Goods (FMCG), Hotels, Paperboards & Packaging, Agribusiness, and Information Technology.

Though the cigarette business contributes to more than 80% profits of the company, 80% of the capital is invested in the non-tobacco business.

Established in 1910, as the Imperial Tobacco Company of India Limited, the company was renamed Indian Tobacco Company Limited in 1970, and later to I.T.C and limited in 1974. The dots in the name were removed in 2001 for the company to be renamed ITC limited.

It employs over 30000 people at more than 60 locations across India and is part of the Forbes 2000 list.

Reliance Industries Limited (RIL) is an Indian conglomerate holding company headquartered in Mumbai, Maharashtra, India.

Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. It is one of the most profitable companies in India, the second-largest publicly traded co. in India by market capitalization, and it is the first company to reach $100 billion in market capitalization. The company is ranked 203rd on the Fortune Global 500 list of the world’s biggest corporations as of 2017. It continues to be India’s largest exporter, accounting for 8% of India’s total merchandise exports with a value of ₹147, 155 crores, and access to markets in 108 countries. It is also the highest income taxpayer in the private sector.

KOTAK MAHINDRA BANK

Kotak Mahindra Bank is an Indian Private Sector Bank headquartered in Mumbai, Maharashtra, India. In February 2003, RBI gave the license to Kotak Mahindra Finance Ltd., the group flagship company, to carry on the banking business.

It offers a wide range of banking products and financial services for corporate and retail customers through a variety of delivery channels and specialized subsidiaries in the areas of personal finance, investment banking, general insurance , life insurance, and wealth management. Bank has a network of 1369 branches across 639 locations and 2163 ATMs in the country.

Axis Bank is the third-largest private sector bank in India, offering a comprehensive suite of financial products. Headquartered in Mumbai, it has a registered office in Ahmedabad. It has 3703 branches, 13814 ATMs, and nine international branches.

The Bank employed over 55000 people and had a market capitalization of ₹1.31 trillion. It sells financial services to large and mid-sized corporations, and SMEs.

As of 30 June 2016, 30.81% of shares are owned by promoters and their group. The remaining 69.19% are owned by Mutual Funds and others.

stock exchange conclusion

• Summarized Finding
• Over some time, many stock exchanges have been developed in India.
• The imaginary portfolio consists of SBI, ITC, Reliance, Kotak, and Axis Bank.
• The Negotiable Instrument Act governs stock exchanges.
• Quotations of share price include opening price, high price, low & closing price.
• Future Scope of Study
• To analyze movt. Of share prices.
• To analyze movt. Of the sharing process of various companies.

ACKNOWLEDGEMENT

I want to express my special thanks of gratitude to my teacher as well as our principal, who gave me the golden opportunity to do this wonderful stock exchange project class 12, helped me in doing a lot of research, and I came to know about so many new things. I am thankful to them. Secondly, I would also like to thank my parents and friends who helped me a lot in finalizing this project within the limited time frame.

CERTIFICATE

This is to certify that the class XYZ school, and he has completed his project under my supervision. He has taken proper care and shown almost sincerity in the completion of this stock exchange project class 12. I certify that this project is up to my expectations and as per the guidelines issued by CBSE

TEACHER’S SIGNATURE

EXAMINER’S SIGNATURE

BIBLIOGRAPHY

• BOOKS: NCERT, SUBHASH DEY
• https://www.moneycowbot.com
• https://en. wikipidia.com
• https://business.dictionary.com
• https://sebi.gov.in

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22 comments.

This project was very helpful for me in completing my project.

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