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 VI. A typical investment transaction

Collection:: Economics Books

A TYPICAL INVESTMENT TRANSACTION 159 interest. Some months before, Jones had bought 100 shares of U. S. Steel common stock as an investment. Since that time the dry goods business which he conducts in Baltimore has grown so rapidly that funds for its expansion are now urgently needed. Jones had noticed that his Steel common was selling at about 150—that is, at $150 a share—and has decided to sell his shares and put the money into his business. Accordingly, he went to his bank, obtained his stock certificate from his safe deposit box, and took it over to the office of Jenkins & Co., his brokers, where he now stands over the ticker. After again satisfying himself by glancing at the tape that U. S. Steel is selling at 150 or better, Jones decides to sell at once and pre- pares a selling ticket. There are several different ways in which he can make his order out, depending, of course, upon his exact wishes regard- ing the sale of his stock. If Jones indicates a definite price at which he will sell his stock, the order is called a “limited” order, and can be executed only at or above the price designated.’ But if no price limit is set, it is called a “market” order, and is executed at the most advantageous price obtainable in the market at that particular time. Usefulness of the Stop-Loss Order.—Jones might wish to place a stop-loss order, so as to limit any losses which he might encounter in the stock he purchases. He might, for example, at the time he gave an order to purchase 100 Ameri- can Sugar at 85, also order his broker to sell that amount “on stop” at 80, in order to limit his loss to around 5 points on the stock so purchased. A stop-loss order is a limited order until the limit is reached, when it becomes a market order. For example, until Sugar sells down to 8o it is not executed, but once this stock has descended to this price, the order becomes an active market order calling for immediate execution. 2A limited order to buy would of course be executed only at or below the price

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