Power of Attorney

Little Old Maybell Bluehair just can't think straight anymore, at least when it comes to managing her considerable money. Husband #4 was loaded and had a weak heart...and ate one too many cheeseburgers. Maybell trusts her grand-nephew Beauregard to make trades on her behalf, and has given him "trading authorization" to manage her account; that is, he can make trades without pre-clearing each one with her.

His status is analogous to having "power of attorney" in doing various legal things in life. Like…you might sign over power of attorney to your legalese-proficient uncle to handle negotiating the terms of your juggling contract, because, with your busy schedule, you have too many, uh...balls in the air.

And you have the option between granting general or limited power of attorney. If you want your uncle to handle all of your finances, general POA makes sense But if you want him to handle your contracts only, then a limited POA would be more appropriate.

So yeah, trading authority is the Wall Street-y version of power of attorney. You might really want to put a few grand into the stock market, but as far as you know, the “stock market” is just a market where they keep produce…stocked.

So you turn over authority to make the actual decisions, and perform the actual trades, to someone you trust to more efficiently handle your money. Because if everything’s left up to little ol’ Miss Bluehair, her entire life savings would be invested in Sweaters for Cats, Inc.