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,
