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.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VI. A typical investment transaction

Collection:: Economics Books

158 THE WORK OF THE STOCK EXCHANGE points, as in the case of the automobile cited above, the next sale price might occur at any point within that range. [n proportion as a market is organized, and all bids and offers brought speedily into it, a severe competition between hidders and between offerers ensues, with the result that the spread is made between the highest bid and the lowest offer. For this reason, not only are price fluctuations between sales minimized, but fairer prices and enhanced negotiability are also attained. This is clearly the case with as highly organized a market as the New York Stock Exchange, upon whose floor the buying and selling orders of the entire nation converge. The Rules of the Exchange (Chapter I, Sec. 9) provide that ordinarily “bids or offers shall not be made at a less varia- tion than 14 of one dollar in stocks, and 18 of 1% of the par value of bonds.” This naturally means that market prices are usually quoted by 4s or multiples of 14s. Work of the Commission Broker.—With this general ohilosophy of prices the average broker is, of course, perfectly acquainted, although his mind is too fully occupied between the trading hours of 10 A.M. and 3 P.M. with specific orders to spend over-much time pondering upon it. His business consists not of theorizing about the forces of supply and demand, but of executing the buying and selling orders caused by those forces, amid the posts, tickers, telephones, and signal boards on the Exchange floor. If we are to comprehend his everyday work, as well as the Stock Exchange machinery whereby he is enabled to carry it on, we must follow a typical “investment transaction’”’—that is, an outright purchase and outright sale of a given security—through all its various stages from begin- ning to end. Origin of a Selling Order.—To commence with the supply or selling side of the transaction, we find Mr. Jones of Balti- more one fine morning reading the stock ticker with evident 1 Qee Chanter V. p. 125.

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