Rensselaer Journal, Volume 11, Number 4, Rensselaer, Jasper County, 4 July 1901 — A TYPICAL BUCKET-SHOP. [ARTICLE]

A TYPICAL BUCKET-SHOP.

Hew These Concerns Which Prey ea *e Unsophisticated Are Run. The typical bucket-shops are generally dingy and ill lighted, because they are located in old buildings whose landlords are particular regarding the tenants* ability to pay and care nothing for the tenants* business. A quotation board occupies one side of the room, as in stockbrokers’ offices throughout the land, and the customers sit before it and study the quotations from the New York Stock Exchange. A “ticker” whirs and clicks away impassively, and a clerk chalks' the quotations on the board or else records them by means of cardboard numbers. Uptown the quotations come by telegraph from a wire direct from the "downtown” office. In certain instances bogus quotations are> given, but this seldom happens in the metropolis—the patrons would not tol•erate it—though It takes place in inland towns. When a .customer desires to “buy” a certain stock—lt to bet on a rise in the price—he gives the -eashler his money, or, theoretically, his "margin,” and receives a “ticket,” or receipt, wherein the flrm acknowledges having purchased a certain number of shares of a certain stock for the customer’s account and risk, at the last quoted price. Thus, if yon wish to go “long” of five shares of Atchison stock at 46, you deposit $5, and receive your receipt showing you have purchased the five shares at 45% —the fraction representing the bucketshop commission for buying, which Is the same that Is charged by members of the New York Stock Exchange. Should the stock rise to 40 you would “cash in.” or take your profits—receive the difference between 45% and 45%, the last eighth being deducted for the selling commission, so that on a onepoint rise you make $3.75 on your five shares. On the other hand, if the price declined % point to 44% you are "wiped;” you lose your entire $5. The commissions for buying and selling are house’s "rake off,” and you really have a run of only 87% cents for your dollar. In the smaller bucket shops, where they take orders for two shares >—and even for one share—they deduct both commissions at once, so that your ticket would read, “Bought one share of Atchison at 45%,” instead of 45%, as in the others, or 45, as it would be In a legitimate office. Should the price decline to 44% you are “wiped”—the shop allows for a decline of but three quarters of a point so that you get only a 75-cent run for your money. Where stocks fluctuate more than a fraction in a day—and all active stocks usually do—it is very easy to be wiped out If you sell a stock “short” the procedure is the same.—Edwin Lefevre, in Harper’s Weekly.