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A: When you buy a stock, you have to decide how you want to own it.

There are several ways: Street name, paper certificate and direct registration. And there are advantages and disadvantages to each.

1. Street name. The most common way to hold stock, perhaps because it's the default method used by most brokers, is in street name. That's when the shares are listed on the issuing company's books in your broker's name, not yours. The broker then lists you as the owner on its books.

There are some big advantages to holding stock this way. For one thing, the dividends go to your broker, who then credits them to your account. This is convenient because you don't need to carry dividend checks to your bank. The broker is also responsible for forwarding any correspondence from the company to you, including annual reports and proxy statements.

With street name, you can more easily buy and sell your stock than if you had the paper certificates, because the stock is at the brokerage. Otherwise you'd have to carry or mail your stock certificates to the brokerage to sell them.

Finally, when you own certificates this way, they're in the care of the brokerage, which is responsible for keeping them safe.

There are disadvantages, too. Some brokerages may not be prompt crediting dividends to your account after they receive them. I've seen some brokers take weeks to do this. And the brokers can lend your shares to other investors, who may want to "short sell" them. That is, they are betting your stock will fall. There is no danger you will lose your shares because the brokerage will make sure you are covered. But some people don't like the idea that their stock can be used to bet against them. You can read more about short-selling here.

2. Paper certificates. This is where you ask your broker to mail the stock certificates to you. There are some advantages to this, because when you own stocks this way, you are listed as the owner on the issuing company's books. All company materials will be sent directly to you. This could speed up the receipt of materials, but not always. You can also more easily use your stock as collateral for a loan.

But there are some huge disadvantages to owning stock certificates. Some brokers charge a fee to send certificates to you, which would drive up your transaction costs. The biggest disadvantage, though, is that you're responsible for safeguarding the stock, which is just like cash. Usually, people keep them in a safe or safe deposit box. If you mail them, you have to send them by registered or certified mail, and insure them. U.S. Stock Transfer Corp. says, "When mailing stock certificates, we suggest you ... insure them for 2% of the market value, which is the approximate cost to replace the certificates if they are lost."

If you lose the certificates, it can be hard to prove you were the owner. And even if you do prove it, there are costs involved in getting certificates replaced.

3. Direct registration. This is where the issuing company holds your shares, but you, not your broker, are listed as owner of the stock. Buying shares directly from the company is the most common way to get direct registration, but some brokers will also handle that for you.

You gain many of the advantages of having paper certificates, but without many of the downsides. You get all company correspondence directly from the issuing company and you can sell the stock without waiting to mail in forms or fill out paperwork. You're not responsible for keeping the paper certificates, and a broker can't lend your shares.

But there are disadvantages, too, primarily in that you won't be able to sell the shares immediately. When buying shares directly from a company, sales are sometimes handled once, at the end of the day, or the week or even the month.

What's the right way to hold your certificates? It's a personal decision. If you're an active trader, you'll certainly want them listed in street name. If you're a long-term investor who feels strongly about short sellers, you may consider direct registration.

The Securities and Exchange Commission has a detailed description of the various ways to own stocks. If you'd like to read more, you can do so here.

Matt Krantz is a financial markets reporter at USA TODAY. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com.