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

238 THE WORK OF THE STOCK EXCHANGE his firm has less than the 20 shares required, it may be neces- sary for him to sell this amount short to the purchasing broker for the time being, and cover the transaction afterwards by purchasing a 100-share lot of the stock from some commission broker or floor trader in the open market. Sometimes odd-lot houses may be temporarily long of thou- sands of shares of a stock, and at other times carry very little. But in general, of course, the odd-lot houses do not conduct their business like a retail grocery shop, and keep “stocked up” with a variety of shares as the latter does with different kinds of provisions. There is no need of such a cumbrous method of doing business, since the odd-lot dealer is standing in the very center of the world market for Sun Oil stock, and he can pur- chase as much as he needs of it in 100-share lots at any time, simply by making a bid for it. Usefulness of the Short Sale—The fact that the odd-lot dealer, if he is to do his work efficiently and quickly must con- stantly take a short as well as a long position in the market, furnishes one of the clearest examples of how very neces- sary the short sale is to a well-balanced and highly organized market.’ For if the odd-lot dealer could not become short of a stock just as readily as he can accumulate and become long of it, the odd-lot machinery 3f the Exchange would be thrown out of balance and prevented from rendering its present vast service to thousands of small investors all over the nation. As in the case of any other short seller, of course, the odd-lot Jealer incurs the risk of loss if the stock advances, and a chance for profit if it declines, between the time of the sale and that of the subsequent purchase. But, unlike the ordinary speculator, the odd-lot dealer often may take a position in stock, whether long or short, not necessarily when he wants to, but at times when his customer-broker desires to sell to him or purchase from him. 5 See Chanter VII, p. 197.

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