how does liquidation of stocks work?

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It’s as the title says. Can it be done at any bank and is there a limit as to how much you can liquidate?

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3 Answers

Anonymous 0 Comments

Liquidation is just you selling off your stocks. It can happen on an entire company scale or an individual doing it. You just need buyers. For major companies, those are other stock holders but it can also be corporations or as you mentioned banks. But for that, the bank needs to be willing to buy said stock.

As for limits, that’s something the company defines and is also something that is protected in the law. We don’t want Bezos to suddenly sell all his shares and tank the price and causes all other shareholders massive loss. So company policies usually have limits to sell off massive shares and though I’m not well versed, the law also has protection for small share owners so someone with 50% of the company can’t sell everything they have and screw the small guy. (Although how much that’s actually enforced is something else)

Anonymous 0 Comments

Liquidity = cash. Your stocks are not spendable, you have to sell them to get the money to be able to spend it. Stocks are sold by a broker. Luckily most are online these days. If you have a paper stock, it is likely just a physical token for an online asset. Log in to the broker to sell them to the highest bidder. Some banks are brokers, but not all brokers are banks.

Anonymous 0 Comments

It means to sell your shares. You’d do it through your brokerage company that holds the shares on your behalf. Nowadays, it usually just clicking a button online that says “sell” and entering how many shares you want to sell, and whether it’s a market order (sell right away, at whatever current price is) or you want to set a specific price at which to sell if/when it hits that price.