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 XVI. The administration of the stock exchange

Collection:: Economics Books

460 THE WORK OF THE STOCK EXCHANGE Bucketshops.—A “bucketshop” is a fictitious stock broker- age office which either pretends to execute its customers’ orders without actually doing so, or to carry such customers’ long commitments when actually it secretly sells them out at once after purchase. If the customer is mistaken in his opinion of the stock which he orders to be purchased, and it declines in- stead of rises, the bucketshop by pretending to sell it out at lower prices can appropriate the customer’s margin. In effect, therefore, the bucketshop makes it a practice to take a position in the market opposite to that of its customers; the French aptly term such firms maisons de contre-partie. “Bucketing” is of course a complete perversion of legitimate stock broker- age, and in its economic effects constitutes mere gambling and wagering on prices, rather than actual speculation. This practice has always been strictly forbidden to Stock Exchange members, who ‘are also prohibited from having any connections or business transactions with non-member firms engaging in such practices. The Constitution states 20 No member shall be directly or indirectly interested in or asso- ciated in business with, or have his office directly or indirectly con- nected by public or private wire or other method or contrivance with, or transact any business directly or indirectly with or for (1) Any bucket-shop; or (2) Any organization, firm or individual making a practice of dealing on differences in market quotations; or (3) Any organization, firm or individual engaged in pur- chasing or selling securities for customers and making a practice of taking the side of the market opposite to the side taken by customers. Many years ago, the.Stock Exchange found that non-mem- ber firms who were “bucketshops” largely depended, to main- tain the fiction of being legitimate stockbrokers, upon the use of Stock Exchange tickers. By restricting the employment of these tickers through the Committee on Quotations and Commissions, the Stock Exchange has in consequence been ~ ® Constitution (Rules, Chapter XII, Sec. 11).

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