Written By:
Paul Tracy
Updated September 30, 2020

What is Disposition?

Disposition refers to disposing of an asset through sale, assignment, or other transfer method. 

How Does Disposition Work?

When an investor sells stock or bonds in a particular company, the sale is referred to as a disposition of the stock or bonds.  Insider trades are reported by a company as the disposition of shares to board members and executives. When a bank reviews its loans and decides to sell the collateral that has been taken in a foreclosure, it is referred to as a disposition of the loan assets.  

Why Does Disposition Matter?

Disposition indicates a transfer of ownership of the asset. The asset is sold or relinquished. Disposition can also describe an asset held as collateral on a loan.