The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VIII. The floor trader and the specialist

Collection:: Economics Books

THE FLOOR TRADER AND THE SPECIALIST 205 opportunity for a profit exists when prices are for the time being out of line with true values.* Since as a rule he quickly sells out purchased stock, and quickly covers his short sales, his transactions are self-nullifying so far as any permanent effects on security prices are concerned. Nevertheless, his swift pur- chases and sales tend temporarily to restrain rising and to cushion falling prices, and, since they are normally undertaken for only fractional profits, they help to create a close market. [t is largely owing to the work of the floor trader that momen- tary inequalities in the market arising from the mechanical methods of executing the round-share orders of commission houses and odd-lot dealers are speedily smoothed out and elimi- nated. In the maintenance of a stock market whose prices are constantly sensitive to supply and demand without erratically responding to mechanical and temporary limitations and con- ditions, a quick dealer for small speculative profits like the floor trader provides a very useful service. Uninformed Prejudice Against the Floor Trader. The floor trader could not afford to do business at such slight profits in a less highly organized market than the Stock Exchange, since he could not then be certain of buying or selling at will. Hence, as a quick “in-and-out” dealer in securities, he is essen- tially a product of the modern continuous market which by a process of evolution has been established on the exchanges. The popular prejudice against him is basically due to the fact that public knowledge has not kept up with the recent swift development of organized markets. Because the floor trader's operations differ from the operations of dealers in more primi- tive and sluggish types of market places, in features developed by the recently created organized markets, they are apt to be regarded as illegitimate gambling transactions. Critics of the floor trader, lacking usually anything but an uninformed preju- dice concerning his indispensable work in the market, fall back upon the clearance system as proof of his villainy. It is of “« Chapter V, p. 133.

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