Part 42

To sum up, the accounting work in connection with the brokerage business is in taking care of the orders received from customers, being sure that they are correctly interpreted and promptly filled, noting the loans necessary to complete the contract, keeping a careful record of commissions and interest due the house, being watchful in regard to the margins of customers, and arranging all accounts with customers so that they may be kept up to date and instantly available.

GLOSSARY OF BOARD OF TRADE TERMS

=BEAR:= One who believes the conditions are ripe for a decline in prices, or one who desires such an event. One may believe that the price of a certain security is about to decline and therefore is said to be a bear on that particular security, whereas he may not be so on others. The natural attitude of a bear is that of a seller but he may be so for the sake of buying at a lower price later.

=BEARING THE MARKET:= An artificial lowering or forcing down of prices.

=BID PRICE:= The price offered or bid for any security or commodity.

=BORROWING STOCK:= A broker borrows stock when he has made a contract to deliver and the stock which he has sold, for any one of various reasons cannot be delivered at the time agreed.

=BREAK IN THE MARKET:= A sudden and considerable decline in price.

=BROKEN LOT:= Same as odd lot in reference to stocks and less than ten thousand dollars par value in bonds.

=BUCKET SHOPS:= Offices run by irresponsible brokers not members of any stock exchange and who do a marginal business upon one dollar per share and upwards. As a matter of fact the stock itself is neither purchased nor sold for the customer by these operators. If the order is actually executed upon a bonâ fide exchange then the bucket shop puts in a contrary order for a like amount. For example: This kind of a dealer would sell an amount equivalent to a customer's purchase or purchase an amount equivalent to a customer's sale, thus, in no event carrying stocks.

=BULL:= One who believes that conditions are ripe for an advance in prices or one who desires such an advance and talks bullish in consequence. One writer defines a bull as a man who has something to sell, consequently he is anxiously waiting for prices to go up that he may sell at a good price.

=BUY AT MARKET:= An order to buy at the lowest prices at which the security can be obtained without any price limit being set by the one giving the order.

=BUYER'S OPTION:= A contract under the terms of which the buyer of a security need not receive delivery until the end of a specified time, but he has the right to demand delivery at any time within the period covered by the contract by giving the seller one day's notice. The understanding is briefly expressed as "buyer 4," "buyer 10," the figures indicating the number of days provided for in the agreement.

=BUYING ORDER:= An order given to a broker to buy a certain security with or without limit as to price as the case may be. An order to buy is good for the date for which it was given only, unless otherwise specified. Sometimes an order is given "until countermanded" or "until cancelled" by which the broker understands that there is no definite limit as to time; but brokers usually remind their customers regarding orders to be sure that they still desire them to be kept in force.

=CABLES:= Telegrams from foreign countries on the conditions of the market. Large brokers receive cables each morning from London, Paris, and other points giving closing prices of grain and provision in that market.

=CALL:= A privilege which one party buys of another to call (receive) from him a certain amount of stocks, grain, etc., at a certain price and date.

=CARRYING CHARGES:= The interest charged by brokers for the amount of money advanced by them to customers in marginal transactions; also used by a Chicago firm to indicate storage rates, interest, and insurance on grain or provisions.

=CASH GRAIN:= Grain for delivery at once. Spot grain has the same meaning.

=COMMISSIONS:= The charge made by any broker for buying or selling securities for someone else.

=CURB:= Securities which are not traded in upon the large stock exchanges or new securities which have not yet been listed upon such exchanges are handled in what is known as the curb market. The reason for the existence of "curb market" in the open rather than in some building is that if the latter plan were pursued there would, in truth, exist another exchange, and it would not be permissible for a member of the regular exchange of the same city to be represented thereon as he frequently now is upon the curb.

=CURBSTONE BROKER:= One who usually, not being a member of the stock exchange, goes from office to office or transacts his business on the curb.

=DELIVERY:= The actual turning over to the buyer of the thing bought. If delivery is offered after hours, the buyer may refuse it until the following business day, but the seller has no right to demand interest for extended time.

=DIVIDEND:= A portion of the profit of a corporation authorized by the board of directors to be paid to the stockholders.

=DUMP:= An amount of stock that is forced upon the market for the purpose of getting rid of it. It does not mean so much the disposing of an undesirable investment but in offering any investment in large amounts.

=EVEN:= A broker is even on stock when he has contracted to receive and deliver equal amounts of the same stock with another broker. A settlement of the difference in prices is the only thing called for.

=FLURRY:= A small panic. An excitement caused by a rapidly falling market and advancing money rates.

=FUTURES:= Buying or selling grain for future delivery. Literally speaking when you buy grain in February which is known as May grain you contract for delivery in May at prices then existing.

=IN SIGHT:= The amount of grain, coffee, cotton, tobacco, or any commodity available for immediate use.

=LIMIT:= A price which a broker must not exceed in executing an order for his customers. It may also be a restriction of the amount to be purchased or sold.