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 IX. The odd-lot business

Collection:: Economics Books

233 offer quotations with—say—a 10-share unit of trading; it would, for example, be very misleading to quote a final bid and offer for a stock as 9g9—99l4%, when 1,000 shares were being offered at 14 and only—say—20 shares bid for at 99. The adoption of the 100-share trading unit on the New York Stock Exchange today is in consequence not simply a matter of theoretical preference, but a practical and unavoidable necessity. Yet at a market value of $100 per share, $10,000 would be needed to purchase 100 shares of stock outright, or $2,500 at least for their purchase on credit. It is apparent that the pres- ent 100-share trading unit, were it not supplemented by other arrangements suited to the needs and requirements of the small investor, would deprive him of many facilities and services which the Stock Exchange daily renders the larger investor. THE ODD-LOT BUSINESS The Odd-Lot System.—Accordingly, a system having for its purpose the making of a market in less than 100-share lots of stock for the wide investing public whose purchases and sales occur in such amounts, has grown up in the Exchange. Certain of its members known as “odd-lot dealers” purchase odd lots of stock and later sell them out in 100-share lots, or sell odd lots which they obtain by purchasing 100-share lots and splitting them up into the smaller desired denominations. Sometimes, instead of buying 100 shares it proves more desir- able to borrow that amount in the manner previously described in the instance of short sales;* but this practice amounts to about the same thing. Any member of the Stock Exchange is, of course, entirely at liberty to take up this work of dealing in odd lots, as well as any other particular sort of business trans- acted on the floor. But in practice, although a few specialists still do an odd-lot business in the particular stocks at their posts, the odd-lot business is today carried on almost entirely by what are known as the “odd-lot houses.” Evolution of the Odd-Lot House.— These odd-lot houses have developed over the past half-century. When in the Civil "See Chapter VII, p. 187.

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