Show W rax t ih y X 4 X A 1 how the bucket shop works by JEAN NEWTON VW y vy y f sfa mcf y V MW V e aw SL a SL ase v M y v w vv v vav evv v vya v u v iata i at A numerous brokerage fal luris eliat took place doroe time ago in few york and the subsequent hinves tt gatlon into the questionable practices of brokers brought into bold relief the bucket shop the disreputable con cem which does not like the honest broker depend tor profit on legitimate commission but exists instead on the losses or its customers and this Is the it works out instead of buying the security which his customer orders on margin as hon est brokers do the in effect appropriates the money banking on a fall in the price of the security when this occurs and the customers margin Is to all intents and purposes wiped out he has profited by that amount it Is in times of a rising market when stock and bond quotations rise and speculators send in orders to sell and remit the profit that bucket shops go to the wall I 1 or not having blought the security they baie nothing to sill and cannot remit a profit all their activities it hilll be seen are a gam ble against tbell customers chances such practices on the part of brok ers had their origin with the introduction of the ticker system by which prices quoted en the exchanges are instantly disseminated and form r K 7 A WK ra WB A W the basis tor speculation all over the country about fifty years ago very soon aft er the chicago board of trade started to make public these quotations there sprang up the original bucket shop was a betting place where the keeper matched his judgment of fu ture prices of grain cotton and ties against that of his patrons this was admittedly a betting place and all who entered there took their chances it was when laws were assed to put these people out of business that they started to cloak their operations beneath he guise of honest broker age transactions and became a far more dangerous element blather the nal ed wolf alun one in sheep s cloth ing opening elaborate offices and almu lating the activities of honest brokers they turned their attention to solicit ing low margin accounts which made speculation more tempting to the lambs that were to be led to the slaughter hy pretending to buy securities curi ties on margin accounts which were usually wiped out by a slight of the market they gained by the customers loss gradually they became more and more pretentious until there was no other manifestation to distinguish these birds of prey who started in shabby betting places from the hon est operators who in good faith car ry on the trade of wall street copyright |