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

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XV. The commission house

Collection:: Economics Books

416 THE WORK OF THE STOCK EXCHANGE placing a price upon the slip at or under which he is willing to purchase the stock, or he may leave it a market order to be executed at the prices prevailing in the market at that time. Market orders, of course, never have a time limit placed upon them. These various limitations placed by customers upon their orders have already been sufficiently outlined in an earlier chapter.” In this particular case, let us suppose that Blank marks his order “G.T.C.” and puts a limit upon it at 124. The Necessity for Maintenance of Margins.—Since the broker is merely the agent of his customers and cannot share in any profits which they may make in their purchases and sales of securities, naturally he cannot be expected to share with them any losses which they may experience. But, as we have seen,’ the commission house contracts for the purchases and sales of securities which its customers may direct, in its own name, and other similar purchasing and selling houses, aided by the Stock Clearing Corporation, will hold it very strictly to account for the payment of money or the delivery of stock called for by these contracts. When the market moves adversely to his customers’ interests, and when in consequence his cus- tomers’ margins tend to diminish and expose him to risk, the broker will therefore, by the terms of the agreement between him and his customers, demand additional margin from them in order to protect himself against incurring losses on their accounts. If a customer ddes not respond to such a call for more margin within a reasonable time, then by the terms of the same agreement the broker is authorized to close out the ac- count of his customer, by selling the latter’s long stock or buy- ing in the stock of which he is short. The soundest and most conservative brokerage practice favors strict insistence upon “margin calls,” and disagreeable though such a call may sometimes be to a customer, he should respect his broker all the more for his promptness in demand- ing more margin. On the other hand, the best interest not only s See Shapter YL p. 159,

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