How to Liquidate Stocks

Stock desk traders are often involved in liquidating large positions for firm clients.

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There are two kinds of stock portfolio liquidation: small portfolio and large portfolio. You can place orders with your stockbroker to sell each individual position if you are liquidating a small portfolio of stocks. Liquidating a large portfolio or holdings of significant amounts concentrated in single stocks is a complex task that requires special professional services of a brokerage or investment advisory firm.

Step 1

Evaluate the holdings you wish to liquidate in terms of their share size, market price and liquidity. A large number of shares or a high market price on your stock are reasons to ask a stockbroker for assistance moving the shares into the market. Low daily volume of transactions in your stock is another indication that you may need professional assistance to sell your stock. If you own stock in a private company you can't sell it on the public markets, so ask a securities attorney how to liquidate the position.

Step 2

Call your stockbroker to discuss your choices in liquidating your stock. Liquidating any stock holding, particularly a large stock portfolio, is a serious undertaking. The liquidation of a large portfolio is tricky and errors in judgment can happen. Get advice and proposals from several investment professionals at different firms.

Step 3

Enter orders as suggested by your financial professional or have the liquidation specialists at your brokerage firm handle your portfolio. If the stock is thinly traded, for example, moving a large block of stock into the market will drop the stock price temporarily. Professional traders can ease the position into the market with minimal effect on the market price, which is something the liquidation specialists or your stockbroker, working with the trading desk, can do for you.