238 THE WORK OF THE STOCK EXCHANGE
his firm has less than the 20 shares required, it may be neces-
sary for him to sell this amount short to the purchasing broker
for the time being, and cover the transaction afterwards by
purchasing a 100-share lot of the stock from some commission
broker or floor trader in the open market.
Sometimes odd-lot houses may be temporarily long of thou-
sands of shares of a stock, and at other times carry very little.
But in general, of course, the odd-lot houses do not conduct
their business like a retail grocery shop, and keep “stocked up”
with a variety of shares as the latter does with different kinds
of provisions. There is no need of such a cumbrous method of
doing business, since the odd-lot dealer is standing in the very
center of the world market for Sun Oil stock, and he can pur-
chase as much as he needs of it in 100-share lots at any time,
simply by making a bid for it.
Usefulness of the Short Sale—The fact that the odd-lot
dealer, if he is to do his work efficiently and quickly must con-
stantly take a short as well as a long position in the market,
furnishes one of the clearest examples of how very neces-
sary the short sale is to a well-balanced and highly organized
market.’ For if the odd-lot dealer could not become short of a
stock just as readily as he can accumulate and become long of
it, the odd-lot machinery 3f the Exchange would be thrown
out of balance and prevented from rendering its present vast
service to thousands of small investors all over the nation. As
in the case of any other short seller, of course, the odd-lot
Jealer incurs the risk of loss if the stock advances, and a chance
for profit if it declines, between the time of the sale and that of
the subsequent purchase. But, unlike the ordinary speculator,
the odd-lot dealer often may take a position in stock, whether
long or short, not necessarily when he wants to, but at times
when his customer-broker desires to sell to him or purchase
from him.
5 See Chanter VII, p. 197.
