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Simple English definitions for legal terms
stock clearing
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A quick definition of stock clearing:
Stock clearing is when someone buys or sells stocks and the money and stocks are exchanged between the buyer and seller. This is usually done by a special company called a clearing corporation.
A more thorough explanation:
Definition: Stock clearing is the process of exchanging money and stocks between a buyer and a seller. This is usually done through a clearing corporation.
Example: When you buy a stock, you pay the seller for the shares you are purchasing. The seller then transfers the shares to your account, and you transfer the money to the seller's account. This process is called stock clearing.
Explanation: Stock clearing is the final step in a stock transaction. It ensures that both the buyer and the seller receive what they are owed. The clearing corporation acts as a middleman, making sure that the money and stocks are transferred correctly. This helps to prevent fraud and errors in the transaction.