How to Trade Private Stock: Everything You Need to Know
Wondering how to trade private stock? Unlike public stocks, private stocks are traded in private, unpublished transactions.3 min read
Wondering how to trade private stock? Unlike public stocks, private stocks are traded in private, unpublished transactions. Trading private stocks is different than trading public stocks and different rules apply to each.
Trading Public Stock
Public stocks are those traded on public exchanges, such as the London and New York stock markets. You can check any online finance portal, such as Google Finance or Yahoo finance and see the price at which a public company's shares were exchanged. The whole world can see this information, free of charge.
You can even view the corporation's income statement, balance sheet, and price history, which often dates back several decades. With this information, it's much easier to make an informed decision and compare the stock to other investment options.
Making an offer to purchase the stocks must be done through a registered broker. If your offer is rejected, you'll be able to know why you were unable to complete the purchase and what price another person paid to obtain the same shares. These days, any individual with an online trading account can easily buy and sell publicly traded stocks with the click of a button.
Various platforms exist that can help private stock sellers and buyers connect. The Carta (formerly eShares) platform maintains information about private stocks, including the names of owners and what they own, transaction logs, and a list of sellers and interested buyers. This type of platform can reassure both parties they are conducting a fair exchange.