ABSTRACT
WHEN the broker, armed with his client’s order, goes to the market in which it can be executed, and confronts the jobber with whom he usually deals because he finds he does his business best, he asks the jobber to make him a price in the stock concerned. He does not say he wants to buy it, for that would tempt the jobber to make the price high ; he does not say he wants to sell it, or that would tempt him to make it low. The jobber would not, of course, give an out-of-the-way quotation, for the broker knows the market price almost as well as he does, but he might be tempted to vary the price by a fraction. As it is, the jobber names two prices, one at which he will sell and one at which he will buy. Suppose it were the Deferred Stock of the Southern Railway Company, the jobber might quote 43 1 2 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_3.tif"/> -44, meaning that he would buy the stock at 43 1 2 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_4.tif"/> or sell it at 44. The broker would probably think that this price was too wide and might say so, implying that the jobber ought to be prepared to buy at a higher price and sell at a lower one. There are jobbers standing near who would like the business and who would make a narrower price. At last, without 36much haggling, for there is little of that in the Stock Exchange, the quotation 43 5 8 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_5.tif"/> -43 7 8 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_6.tif"/> may be obtained. The broker need not have to ask for the price at all, the jobbers may be shouting that they are willing to buy or sell at a certain price, or that they are willing to deal either way. At all events, the broker being content with the quotation 43 6 8 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_7.tif"/> -43 7 8 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_8.tif"/> , and being commissioned to buy, informs the jobber that he buys so much stock from him at 43 7 8 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315164878/c95c510e-3394-4f85-8a5d-9d761343efe6/content/math6_9.tif"/> .
