Before there were computers, in order to own stock, investors received paper stocks and bond certificates as proof of ownership in the companies. There are still people out there that prefer to hold their stocks in the form of paper. There are a few easier ways in today's world to own stocks.

We should start with how stocks are traded to give you an understanding. Publicly traded stocks are usually bought and sold with a broker or an agent. Most of the time in the old days, you called your broker and told them you wanted to buy or sell so many shares of a specific stock, then they did what you asked. Now days you can buy them online yourself on a handful of websites.

If an investor is buying a stock, they must give the cash to the broker in order to buy the stock in a specific amount of time. If you are buying online, then you have to deposit the money in your account before you will be able to purchase any stock. If you are placing orders yourself online, you can tell the broker that you sign up with when to sell and what price to sell at. The same goes for buying, you can buy at a certain price and when to buy.

If you have a certificate, this can create some clearing that has to be done before you can move any money around. Most brokerages will not sell a stock if it is held in paper form without already holding it under its real name in an electronic account. This is not very common in today's world. People still prefer to hold a piece of paper, rather than look at a computer though. I believe most of the people that do this are the older crowd that are used to the old days. This is fine, but the time it takes to buy and sell can be cumbersome.