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

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter V. The dangers and benefits of stock speculation

Collection:: Economics Books

[28 THE WORK OF THE STOCK EXCHANGE Exchange to buy or sell dividends or to bet upon the course of the market.” Furthermore, “Public announcement by a Stock Exchange firm or one of its members regarding moneys held for the purpose of betting on elections or on any other matters 's prohibited.” Unlike the Stock Exchanges of London, Paris, Berlin, and other great financial centers, the New York Stock Exchange even forbids optional contracts (“puts,” “calls,” etc.) on its floor, on the grounds that when such contracts are not actually -xercised, they might be construed as wagering on the course of prices, despite their value as a means of insurance. It is therefore only common justice to declare that, as far as the Stock Exchange is concerned such phrases as “stock gambler” or “gambling in stocks,” when not a deliberate and conscious perversion of the truth, can arise only from the fullness of economic ignorance. Economic Function of Speculation.—One vital economic service of market speculation consists in the assumption of those necessary risks which always exist during the process of distributing any kind of property. So fundamental an eco- nomic factor as speculation inevitably pervades every type of market and not simply the organized markets. The corner grocer who buys 100 pounds of sugar at 8 cents to distribute among his ‘customers at IO cents is essentially a speculative dealer. He has no intention of consuming himself all this sugar, but buys it with the hope of profiting by selling it at a price above its purchase price. This profit is earned because of the services which he renders in distributing the sugar, and is justified because of the risk which he assumes in holding it himself ready for sale. If the price of sugar declines below the purchasing price before the grocer has sold out his stock, he may of course incur a loss on his inherently speculative dealings in it. The economic functions of the speculative dealer in Stock Exchange securities are in their main features identical with

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