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 VIII. The floor trader and the specialist

Collection:: Economics Books

THE FLOOR TRADER AND THE SPECIALIST 229 one of the chief reasons why in such inactive stocks occasional bad breaks in price of this kind occur. “Touching Off Stop-Loss Orders.”—Sometimes complaint is made to the Stock Exchange, that traders there make it a practice to “gun for stop orders.” In other words, if a trader knew that by selling a few shares short he could sufficiently exhaust the demand for it at higher prices, and cause its price to decline to a point where several stop-loss orders would auto- matically be converted into market selling orders and cause a further price decline, he could cover his short sale at the lower price thus reached and thus obtain a profit for himself. In point of fact, this sequence of events occurs now and then, but more by accident than by design. For it must be remembered that the short seller cannot possibly know all the factors of supply and demand existing in the market. Such an attempt might involve sales of a large number of shares, and the conse- quent danger of heavy losses. Moreover, the depression of a price by such selling might equally well uncover large buying orders, which would either halt the decline, or in certain cir- cumstances (as with stop orders to buy) drive prices back to higher levels. Of course, if the specialist attempted to take advantage of his knowledge of his orders, he would by no means be certain of success, since, as we have seen, the dominant influence of supply and demand may really exist at a given time in the crowd rather than in his book. Moreover, such an attempt by the specialist would be practically certain of detection by the crowd, and, owing to the concentration of orders in his hands, he would be certain of conviction. The price of such an attempt on his part would be expulsion from the Exchange, permanent disgrace, and the end of his career as a security dealer. Violent declines due to stop orders being accidentally “touched off” will always occur now and then in the Stock Exchange. An example of much the same thing has, indeed, been given above. The newspaper man, bending over his type-

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