Equities

With TD Direct Investing, you can buy or sell equities listed on every major market in North America and many of the major stock markets across the globe. Equities are common or preferred stock representing direct ownership in a corporation.

• Common stock represents ownership in a corporation by providing the stock holder with a claim on corporate profits and assets; however, in the case of bankruptcy and/or liquidation of the company, common stock holders may not have a claim on assets until bond holders, preferred stock holders and other debt owners are paid back in full. Additionally, common stock generally provides investors with voting rights, allowing them to "control" a corporation by electing the Corporation's Board.

• Preferred stock typically does not include voting rights. However, preferred shareholders generally have a greater claim to the corporate assets and are paid before common shareholders in a dividend distribution.

Equities-related Investments:

If you are interested in more sophisticated investments for your portfolio, you can also buy and sell exchange-traded derivatives, such as index and equity-linked options, rights and warrants, through TD Direct Investing.

An option is a derivative instrument that gives the purchaser the right, but not the obligation to, buy or sell an underlying asset at a certain price (exercise price) on or before an agreed date. For this right the purchaser pays a premium to the seller (writer) of the option. The writer has an obligation, if called upon to do so by the purchaser, to buy, in the case of puts, or sell, in the case of calls, at the exercise price.

There are two major types of stock markets, auction and dealer. The prices of exchange-listed stocks in an auction market are determined by the forces of supply and demand. Individual client orders to buy a stock are relayed to the exchange, where they are posted and matched with outstanding order to sell. The TSE and NYSE are examples of auction markets.

When you trade equities in a dealer market, you are buying from or selling to a dealer that trades with a network of other dealers. These are negotiated markets where the bid and ask quotations are entered by the dealers acting as 'market makers' in a particular security. The Canadian Dealing Network and NASDAQ in the U.S. are dealer (or over-the-counter) markets.

Here are a few examples of terminology you should know before you place your first order.

Market Order

Your order to buy or sell a security at the best bid or ask price available on the market, right away. Using a market order provides the best opportunity to have an order filled, but it gives less control over the price at which the order gets filled.

Limit Order

You set the maximum price you are willing to pay for a stock as a buyer or the minimum price you are willing to accept as a seller, but you won’t know if or when your order will be filled. Types of limit orders include:

With TD Direct Investing’s state-of-the-art trading platforms, most market orders can be filled and confirmed almost immediately (during trading hours).

Day Order

An order valid only for the day on which it is entered.

Open Order

Remains valid at a specific price until the order is executed or cancelled, to a maximum of 30 days (and then automatically expires).

Stop Loss Order

An order to sell, which becomes effective as a market order when one board lot trades at or below the stated limit (stop) price. A Stop Buy Order is just the opposite, effective when the price reaches or exceeds the stop limit.

Ready to place an order? Get help and support from Investment Representatives at TD Direct Investing. Through our team of specialists, online tools and educational resources, clients can make more informed investment decisions.

We can help you:

• Access expert insights, independent research and analytical tools
• Stay connected to the latest trends affecting the stock markets
• Easily place an equities order, online or by phone