Selling stocks

[rew3z]

Probably a basic question, but need help in understanding what the differences are in my decision.

I currently own stocks in Ameritrade (from about 5 different companies). I purchased the stocks about the same time they have not changed in years. I am now ready to close the account and just withdraw my money.
I understand, from Ameritrade, that I have a few choices: 1. Sell the securities for $40 to receive the certificate and then close the account or 2. sell the stock to a broker and then I can withdraw my money and close my account.

Can anyone explain the differences and/or best choice. And would the take home percentage be different? By the way, I essentially just want to free up the cash for future commitments/purchases.

[genchan]

Re: Selling stocks

If you receive the certificate, that just entitles you to those stocks, right? It wouldn't be cash, but a certificate and that doesn't sound like what you want. You need to ask if there is a flat charge or % charge to have the stock broker sell the stocks.

[baselle]

Re: Selling stocks

It sounds like choice 1 merely moves the stock from street name to your name as the shareholder. You close your account w/Ameritrade, but now you really own the stock certificate, which you can sell to whomever. If your future commitment is to form a DRP with the stock, essentially sending it to the company directly, this would be the way to go.

If you are looking for the money, choice 1 must turn into choice 2 - you cash out and sell your stock through the brokerage. They will charge you for the pleasure, and they will also charge you an SEC fee. It will probably be more than 40$.

You'd probably pay twice on option 1 if you just want the cash. If you had the certificate, you could take it to any brokerage to sell the certificate, but they would charge you a similar fee and the SEC fee as well.

The confusion comes because closing your account and selling the shares within is a two step process, not a one step process. Remember, when you hold stocks in Ameritrade, Schwab, TDW, etc, you don't really "own" a stock outright. The brokerage owns a pool of that stock and essentially pins your name on however many stocks you hold. Semantics, yes, but what comes with that is convenience. Once upon a time, you could only buy stocks in round lots -- in a batch of 100 shares. It made a shareholder plunk down some serious money (if he wasn't buying on margin).

Whatever you do, though, make sure you keep your paperwork after the sale! If at all possible, have the brokerage send you dups of any statements regarding these stocks - when you bought them, the price you paid, etc. It will save you the rendering of garments and the gnashing of teeth during tax time next year.

[JLP]

Re: Selling stocks

To add to what Basalle said, your stocks in your Ameritrade account are held in street name (meaning, the brokerage has the certificates for them). If you close the account, you can transfer the securities in-kind to another brokerage firm or you can have the certificates printed up and sent to you.

If you choose the certificates, you can then open another brokerage account and give them your certificates. Or, you could possibly open a DRIP account with the company who's shares you own.

Hope this was helpful.