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.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XV. The commission house

Collection:: Economics Books

130 THE WORK OF THE STOCK EXCHANGE frequently, while some stocks are rising others are declining. Thus it is quite possible for the customer’s debit balance to be increased at the same time by rising prices on his short stock and declining prices on his long stock. If meanwhile his debit balance had been reduced by fully crediting against it the market value of the short stock, his unhappy broker might under the circumstances have to be prompt to call for more margin in order to save himself from serious loss. The Margin Card.—A current record of Blank’s equity in his account—or his “margin,” -as it is more often called—is constantly kept by the margin clerk of the brokerage house. The broader economic significance of margins has already been discussed in a previous chapter.’ The margin clerk keeps a separate record for every customer of his house, and constantly adjusts the customers’ margins as the trend of security prices dictates. In this way the commission house is always in touch with the amount of margin maintained by each of its cus- tomers, and in a position to call the given customer for more margin, or to know whether he can safely make new transac- tions on the basis of his existing margin. The margin cards used by different Stock Exchange commission houses differ more or less in their details. Figure 57 represents a form of margin card easy for the layman to understand; it cannot be said, however, that this particular form is typical of margin cards generally employed. The items which it contains show the condition of Mr. Blank’s margin at the time when his monthly statement above included was issued. It will be noted that the securities which the customer originally owned out- right, but which he deposited as margin, are entered exactly like the securities which he subsequently bought on margin. At the top of the margin card, the customer’s debit or credit balance, and the market value of his long and short stock are entered. These figures, as well as the margin derived from 2 See Chapter VII, p. 184.

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