Equity Securities

Equity securities make up a large share of Series 7 product questions because representatives must understand how ownership interests trade, how shareholder rights work, and how corporate events affect customers. This chapter moves from common and preferred stock into secondary-market mechanics, issuer actions, and offering activity.

Use the section pages below to separate product characteristics from trading practice. Together they cover the equity concepts most likely to appear in recommendation, disclosure, and order-handling fact patterns.

In this section

• Common Stock
  Understand common stock characteristics, shareholder rights, splits, dividends, and the main risks and benefits.
• Preferred Stock
  Review preferred-stock features, common types, dividend treatment, conversion rights, and investor risks.
• Equity Trading
  Learn equity order handling, execution, settlement, confirmations, and the core mechanics of stock trading.
• Corporate Actions
  Study mergers, spin-offs, tender offers, buybacks, and how equity corporate actions affect investors.
• Public Offerings and Private Placements
  Compare IPOs, follow-on offerings, and private placements at the level expected on the Series 7.