Most US individuals who buy stocks or ETFs do so through a brokerage firm — a licensed intermediary that opens accounts, routes orders, and holds positions in electronic book-entry form. This guide explains the high-level plumbing for education. It is not personalised advice, not a broker comparison, and not an invitation to open any specific account.
What a brokerage does
A broker-dealer registered with regulators (and typically a member of FINRA for many firms) can accept customer orders to buy or sell securities. Your relationship is contractual: customer agreements, margin agreements (if any), fee schedules, and privacy notices. Stock Meerkat is not a broker and cannot open accounts for you.
Common account types (overview)
- Taxable brokerage account — flexible contributions and withdrawals; taxable events such as dividends and realised capital gains may apply.
- Individual Retirement Accounts (IRAs) — tax-advantaged retirement wrappers with contribution limits and distribution rules set by tax law.
- Joint accounts, trust accounts, custodial accounts — ownership structures with different legal implications.
- Margin accounts — allow borrowing against eligible securities; amplify gains and losses and can lead to margin calls. Education is not encouragement.
Choosing an account type involves tax and legal considerations. Speak with licensed tax or financial professionals when needed.
Cash versus margin (conceptual)
In a cash account, you generally pay in full for purchases (subject to settlement rules). Margin introduces leverage: the firm lends against collateral. Interest accrues; forced sales can occur if equity falls. Beginners should treat margin as an advanced topic requiring careful reading of disclosures — not a default setting.
SIPC themes (high level)
Many US brokerage accounts mention SIPC — the Securities Investor Protection Corporation. In broad educational terms, SIPC works to restore customers’ cash and securities in the event of a member broker’s failure, subject to limits and conditions. SIPC does not protect you against market losses if investments decline in value. Excess insurance policies at some firms are separate private arrangements. Always read the firm’s own explanations and official SIPC materials; rules and coverage details are beyond a single webpage.
How your shares are usually held
Retail investors typically hold securities in “street name”: the broker’s nominee appears on the issuer’s books, while the broker’s records show you as the beneficial owner. That is normal US market plumbing and enables efficient trading and corporate-action processing. Direct registration (DRS) and certificate themes are covered in custody and street name.
Order routing and best execution themes
When you click buy, your broker routes the order according to its procedures — to exchanges, market makers, or other venues. Firms have best-execution obligations and publish disclosures about payment for order flow and routing statistics where required. Learners should know that “the market” is a network of venues, not a single counter in the sky.
Settlement basics
US equity trades settle on a shortened cycle that has moved over time (learners often hear “T+1” in recent commentary). Settlement means the exchange of cash and securities through clearing systems. Selling before settlement or free-riding violations can create account restrictions — another reason to read your broker’s education centre.
Fees you might see
Commissions (often $0 for many US online stock and ETF trades, though not universal), options contract fees, wire fees, account fees, margin interest, mutual fund loads (if any), and ADR fees for certain foreign listings. “Commission-free” does not mean cost-free: spreads, fund expenses, and cash-drag matter.
Brokerage literacy is accounts, custody, settlement, and protection boundaries — not which app has the flashiest greenery.
What Stock Meerkat will never do
We will not open accounts, solicit trades, guarantee returns, or pretend to be FINRA-registered. If you need to invest, use licensed channels after your own research.
Delayed quotes on this site
Our ticker tape may show delayed market prices for familiar US symbols while you learn. Those quotes are educational orientation tools — not a substitute for your broker’s trading ticket.
Keep learning
Continue with custody, order types, and ETF basics.