The stock broker acts as the middleman in negotiating contracts between buyer and seller, but in a legal sense is the agent of only one party to the transaction. Since the trader must rely very largely upon the advice of his broker, it becomes of first importance that the broker should be a cool-headed man, whose judgment concerning all matters relating to the stock market can be taken as accurate. The broker is supposed to keep himself thoroughly posted as to passing events in the financial and commercial world, both at home and abroad. His view must be a comprehensive one, and he must be able to recommend a wise course of action for his client, based upon his mature judgment of the future. The established brokerage charge is one-eighth of one per cent. upon the par value of the stock bought or sold, for either buying or selling, or one-fourth of one per cent. for what is called a "round trade," consisting in both buying and selling the stock. Some brokers do a strictly commission business, while others combine this with trading on their own account.

A "short" is one who has sold stock that he does not own, but which he hopes to buy, before time for delivery, at a price below that for which he sold. Since it is now to his advantage to depress the market in order that he may be able to fill his contracts at a lower price, he is a "bear" in the market, and his efforts are devoted to "bearing" or pounding the price downward. When a "short" has been able to buy enough stock to fill his contracts he is said to have "covered." If he finds himself unable to cover except at a loss, he may "liquidate," which consists in paying the difference to the other party. A "long" is exactly the opposite of a short, - one who has bought more stock than he had contracted to sell, and is therefore anxious that the market should advance, in order that he may dispose of his holdings at a profit. He is, therefore, interested in tossing the price upward by every means within his power, and hence is called a "bull." A "bull market" is one in which prices are advancing. A "bear" market is one in which prices are declining.

A "put" is the right which a broker has by contract to deliver to another a specified amount of a stock at an agreed price within a specified time. If the market declines, the broker who has a "put" may buy the stock and deliver it at a higher price, realizing the difference as a profit. A "call" is the right to demand, or call for a specified amount of stock at an agreed price, within a fixed time. The owner of a "call" is a bull. It is to his advantage to have the price advance, for then he may call his stock and sell it at an advance. A "spread" is a combination of a put and a call. The holder of a spread has the privilege of delivering the stock at one price or calling it at another. For the privilege of a put, call or spread, a fee is paid by the broker who buys it, varying in amount, according to the value of the privilege as estimated according to the condition and probabilities of the market.

Numerous terms in addition to those already mentioned have been coined especially for the stock market. A "point" is one per cent. in the price of a stock or bond. The market is "steady" when it holds its own, "firm" when it advances, and "weak" when it declines. A "pool" is a combination of operators acting together for a common end. A "blind pool" is one in which all the operators are kept in ignorance of its operations except the one person who manages it. The object to be attained is absolute secrecy. A "wash sale" is a fictitious transaction made by two or more members who act in collusion merely for the purpose of giving the appearance of a rise or fall in the price of a certain stock, or swelling the volume of its apparent sales and thus influencing others to buy or sell.

Listing securities consists in placing them upon the records of the stock exchange so that they may be traded in by members. Securities not thus recognized or listed cannot be the object of transactions upon the floor of the exchange. Listing stocks or bonds does not make the exchange a guarantor of their value, but is an evidence of their genuineness. Buyers must judge for themselves the value of the securities which they purchase. By the operation of listing, however, the securities are required to pass an investigation which in a measure establishes their character as reliable, and thus to a certain extent protects the buyer. A corporation desiring to have its stock or bonds listed, must file a written statement with the Listing Committee of the Stock Exchange, setting forth the fullest details concerning the company and its securities, - its name, date and place of organization, authorized capital, amount of stock, preferred and common, amount actually paid in on the stock, amount of liability of stock holders, name and address of the Registrar, description of the assets of the company, detailed statement of the nature of the company's liabilities, gross and net earnings for the past year if the company has been in business that long, or a copy of the company's balance sheet for the previous year, also a description of the bonded indebtedness outstanding of the company, if any, names and addresses of the officers and directors, etc. Thus a full history of the past, and a description of the present condition of the company is placed on record with the Stock Exchange Committee, who, after due consideration, vote to refuse or admit the securities to the privilege of the Stock Exchange. With these safeguards, thrown around the market, together with the reListing

Securities quirements usually added by the listing committee that a Trust Company shall act as trustee of the mortgage and registrar of the bonds, if bonds are to be floated, investors may deal in securities with a large degree of confidence and safety. Banks will accept listed securities as collateral more readily than others.