Legal Definitions - stock clearing

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.