158 THE WORK OF THE STOCK EXCHANGE

points, as in the case of the automobile cited above, the next
sale price might occur at any point within that range.
[n proportion as a market is organized, and all bids and
offers brought speedily into it, a severe competition between
hidders and between offerers ensues, with the result that the
spread is made between the highest bid and the lowest offer.
For this reason, not only are price fluctuations between sales
minimized, but fairer prices and enhanced negotiability are
also attained. This is clearly the case with as highly organized
a market as the New York Stock Exchange, upon whose floor
the buying and selling orders of the entire nation converge.
The Rules of the Exchange (Chapter I, Sec. 9) provide
that ordinarily “bids or offers shall not be made at a less variation
 than 14 of one dollar in stocks, and 18 of 1% of the par
value of bonds.” This naturally means that market prices are
usually quoted by 4s or multiples of 14s.

Work of the Commission Broker.—With this general
ohilosophy of prices the average broker is, of course, perfectly
acquainted, although his mind is too fully occupied between
the trading hours of 10 A.M. and 3 P.M. with specific orders to
spend over-much time pondering upon it. His business consists
not of theorizing about the forces of supply and demand, but
of executing the buying and selling orders caused by those
forces, amid the posts, tickers, telephones, and signal boards
on the Exchange floor. If we are to comprehend his everyday
work, as well as the Stock Exchange machinery whereby he is
enabled to carry it on, we must follow a typical “investment
transaction’”’—that is, an outright purchase and outright sale
of a given security—through all its various stages from beginning
 to end.

Origin of a Selling Order.—To commence with the supply
or selling side of the transaction, we find Mr. Jones of Baltimore
 one fine morning reading the stock ticker with evident

1 Qee Chanter V. p. 125.