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 VII. Credit transactions in securities

Collection:: Economics Books

CREDIT TRANSACTIONS IN SECURITIES 105 furthered human progress in the past few centuries, and with- out which (as even the Bolsheviki in Russia discovered) not merely the luxuries, conveniences, and comforts, but even the barest necessities of life cannot be daily afforded to mankind. [t has furthermore been shown that margin purchases and short sales are reciprocal and presuppose each other, for if we cannot sell (or exchange) what we do not possess, we can never buy more of anything than we are able to pay for. The question then arises whether the economic results flow- ing from the employment of these methods of purchasing or selling on credit, however legitimate they may be as mere methods. are beneficial or desirable. Use of Credit for Investment Transactions.—In this con- nection one fact infrequently recognized is that neither margin purchases nor short sales of stocks are necessarily undertaken for speculative purchases. In many cases, where the investor wishes to purchase stocks outright for cash, the broker, who of course cannot tell at exactly what price the required shares can be purchased, may ask him to deposit 50% of their latest price and pay the balance after they have been purchased. Such a practice is essentially a purchase on credit, even if it is not commonly called a “margin purchase” in Wall Street. Simi- larly, the owner of 100 shares of Steel may desire to sell them at a time when he is in London or San Francisco, and his shares are securely locked up in his New York safe deposit box. Under such circumstances he may instruct his broker to sell 100 shares of Steel short, and cover the short sale on his return to New York by getting his stock from his box and delivering it to his broker. Thus margin purchasing and short selling may be and often are employed as conveniences in what are essentially outright purchases and sales. Furthermore, were it impossible to buy and sell stocks on credit, the odd-lot dealer, whose business consists of purchasing or selling from 1 to 99 shares of all listed stocks, could not carry on his useful work.’®* The odd-lot dealer is constantly 13 See Chapter IX. p. 233.

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