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 XI. The security collateral loan market

Collection:: Economics Books

282 THE WORK OF THE STOCK EXCHANGE in securities, or to make commercial loans to borrowers whose credit would not justify unsecured banking advances. In the New York financial center, however, security loans are made almost entirely for financial reasons, such as carrying customers’ margin purchases for a broker,” or undistributed new securities for a dealer.’® Since firms which are members of the New York Stock Exchange may also be members of the New York Curb Market or of out-of-town stock exchanges, may participate in new security underwritings and flotations and may also operate extensive “unlisted departments” dealing in securities whose only market is “over-the-counter,” the secu- rity loans contracted by Stock Exchange houses may occasion- ally contain in their collateral, issues listed on many different stock exchanges and sometimes on no stock exchange at all. In the aggregate, security collateral carried in this way in Wall Street constitutes the dealers’ floating or market supply of securities, or the amount which investors have not as yet purchased. We have seen! that a broker who purchased 100 shares of Steel at 150 for his customer on a 50-point margin, has to pay ff the seller in full the next day, and therefore has to obtain promptly the $10,000 which the customer owes on the security. This he does as a rule by placing the certificate in a collateral loan, and if necessary financing himself on unsecured “day loans” until the proceeds of the secured loan become avail: able. 12 As a rule, it is between 10 A.M. and 2:30 P.M. that Stock Exchange firms telephone their floor members to obtain col- lateral loans to carry the aggregate amount of the day’s trans- actions, or on account of loans previously made but then called or paid off, or for other purposes. The floor member who receives such a message goes to the “money desk” on the floor and thus gets in contact with the available lenders. ® See Chapter VII, p. 182 10 See Chapter IV, p. 91. u Chapter VII, p. 182, i2 Chaoter XII, pn. 343.

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