Who Is Holding Your Stocks?

If securities in your account are held in street name, then the registered owner is your brokerage firm, not you.
There are two types of accounts you can open with a brokerage firm: cash and margin.
If you have a cash account, then you are the owner of the securities, because their purchase was funded entirely by you. However, if you have a margin account, your stocks will probably be held in street name.
Why would the broker want to own the stocks in your account?
In the case of a margin account, some cash comes from you and the remainder of the funding comes in …read more