The work of the Stock Exchange

Bibliographic data

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.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IX. The odd-lot business

Collection:: Economics Books

THE ODD-LOT BUSINESS 241 among the different brokerage houses and according to the number of shares bought or sold; in many cases, the minimum commission charge is $2, although some firms would make a higher charge. The broker cannot make any other profit from an odd-lot transaction, however, since he is not a dealer, but merely his customer’s agent. The odd-lot dealer, on the other hand, being a dealer and not a broker, cannot charge any com- mission for his services, but must rely for his profits on the difference between the prices of his sales and his purchases. Determining the Price.—With this background of the mechanical side of the odd-lot business, we are now in a posi- tion to consider how the prices at which such typical purchases and sales as those discussed above are determined. The price at which odd-lot houses can profitably and regularly afford to deal in odd-lots of stock depends fundamentally upon the cur- rent market prices for the sales of the same stocks in 100-share lots, as well as upon such limitations as may be placed upon the buying or selling orders of the customers. The activity of the particular stock is also an essential factor in this question of price, as we shall see. In the case of the most active stocks it is customary for odd-lot dealers to sell odd-lots at 4 above, or buy them at 14 below, the next sale of 100 shares, Thus, an odd-lot dealer in receipt of an order to make a purchase or sale of 20 shares of Bethlehem Steel common will wait about the post where this stock is traded in until the next 100-share transaction occurs. If 100 shares of Bethlehem Steel should be sold—let us say— at 95, the odd-lot dealer would under the circumstances sell 20 shares for 9514, or buy them for 94.74. Transactions Made at Bid and Offer Prices.—Since on this basis odd-lot trading involves waiting for a sale of 100 shares, another method is sometimes resorted to, which avoids the delay. In most active stocks the odd-lot dealer will buy or sell at once, if he is allowed to buy the odd number of shares

Access restriction

Copyright

fullscreen: The work of the Stock Exchange

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation