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APPENDIX 
has orders from two principals to buy and to sell and not to give up, 
such orders being executed in accordance with Section 13 of Chapter 
I, in which case he must add to his name on the report the words ‘on 
order.’ 
“Sec. 2. When a member either takes the book of a Specialist 
temporarily or an order from another member, he shall, while he is 
in possession of that book or order and for the balance of that 
particular day, stand in the same relationship to the book or order 
as the Specialist or other member himself.” 
(VIIIe) The provisions in the Rules of the New York Stock 
Exchange relating to this phase of members’ operations are as follows: 
Chapter I. Sec. 13 (p. 80) “When a member has an order to buy 
and an order to sell the same security, he must offer such security, 
if bonds at }§ of 19, and if stocks at 14 of one dollar, higher than 
his bid before making a transaction with himself, if not so already 
bid or offered.” 
(VIIIf) The following sequence of events is typical as a cause of 
misunderstandings arising from the use of orders “on stop.”  Com- 
mission broker A—let us say—obtains an order from his customer, 
Jones, to sell 100 shares of a rather inactive stock at the market. 
When A arrives at the post where the given stock is traded in, it is 
quoted “63 bid, 68 asked.” A says to the specialist B, “I have a market 
order to sell.” B replies, “I want 200 at 63. I'll stop 100 with you,” 
(i.e, if a sale is publicly made at 63, A and B will conclude a private 
sale of 100 shares at that price). A moment later broker C enters 
the crowd and offers 200 shares for sale. B says to him, “I am 
bidding for 100 (the remaining 100 of his original 200 shares to buy). 
I also have a market order to sell, so that no matter what you offer 
your stock at, I must offer it 1% lower.” 
Under the circumstances C says, “I will sell you 100 at 63,” to 
which B agrees. On this sale the order on stop between A and B 
is also executed. Thus, A sells his stock at 63, and B purchases his 
200 shares at that price. But since the order on stop is a private 
transaction it is not printed on the tape and only C's sale of 100 to 
B is regarded as “100 shares at 63.” The market then becomes 
stronger and C’s order for the remaining 100 to sell is canceled. 
Soon D comes into the crowd and concludes a sale with E at 64. 
Meanwhile, A’s customer, Jones, watches the tape. He sees the 
quotation 100 at 63 (made on C’s sale to B), and not understanding 
that orders on stop are not recorded there, takes it for his own. If 
the market had continued to decline, he would consider himself