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.