The "Turn."

The difference between the two prices quoted by the jobber in any transaction is termed the " turn " (or the "turn of the market") and furnishes the profit which the jobber secures. The quotation for a stock is "wide," that is, there is more than a fractional difference between the buying and the selling price, sometimes a substantial difference, when the dealings in that stock are few or not readily arrangeable; when, that is to say, the stock is not one in which the public frequently invest, or when a feeling of apprehension attaches to the stock, such as will be produced on adverse news respecting the stability or prosperity of the company or body which has issued it, so that buyers are scanty and sellers numerous. And in the incipient and successive stages of spreading nervousness or panic the buying and selling prices quoted for stocks generally will more and more widely diverge. The jobber in these circumstances seeks to protect himself by the range of his quotation.

A "Wide" Quotation Illustrated

Suppose that he names 70-74. Assuming the existence of adverse views and disquieting conditions attaching in the market to the stock in question, let us consider the position and prospects of the jobber were he to reduce his quotation from 70-74 to 71-73. If he purchased at 71 instead of 70 he would obviously stand a heavier chance of sustaining a loss when he endeavoured for the purpose of balancing his account to sell what he had bought at a profit to another jobber or broker; for example, if he could only sell at 70½ he would by having quoted 70 realise a profit of ½ per cent, while if he had increased the price to 71 he would lose ½ per cent. If, again, he sold to the broker at 74 in place of 73 his prospect of a profitable conclusion to the transaction is increased: he possesses a greater number of chances in his favour; for if he can subsequently purchase what he has sold at 73¼ only, in the one case (selling at 74) he obtains a profit of ¼ per cent, while if he had decreased the selling price to 73 a loss of the same amount would be incurred. And, as has already been remarked, the difference between any particular jobber's buying and selling price, however wide, cannot transgress the real current appreciation in the market of the value of the security, since any quotation, if illegitimately divergent, involves the instant redress produced by the competition of other jobbers.

"Depressed" Prices

The reader, no doubt, has often been perplexed by the quasi-metaphorical language adopted in the money articles of newspapers, but an instance may now be cited where the phrase is literally accurate. When alarming political or financial news is received from abroad, which acts adversely upon securities, the dealers are stated to "depress" the prices of foreign stocks and of home stocks which are likely to be included within the range of the influence which the news exerts. The statement is precisely correct. The jobbers make the current market price of the securities in which they deal; they fix the prices at which they will buy and sell; and if, for example, in the case just supposed they had on the preceding day quoted 69-70, it is within their province and power on the day when the news arrives to rearrange, for fresh transactions and for their protection against loss (the chance of which has increased), the price at 68 -71 or any other figures, - they being the merchants to whom all customers must apply, and their decisions constituting the ruling values.

The Jobber Performs A Valuable Public Service

It is evident that the existence of the jobber, and the fact of his being always ready to name a price for a security, although that security may not then be really in his possession, afford invaluable service to the public in enabling them to arrange and complete bargains upon the Exchange with certainty and promptitude. This assertion of public convenience and advantage may be slightly amplified. Without the jobber (constantly accessible to the broker) one may appreciate the waste of valuable time and the increase of anxiety (though on account of their vastness in the aggregate incapable of estimate) which would be entailed upon the community if every buyer and seller of stocks were compelled to institute a search, without even a clue, to discover a seller or buyer. The grave inconvenience would itself create the class of jobbers were they not already existent. The modern practice of converting private businesses into joint stock undertakings would be practically impossible unless jobbers were provided to furnish a market for their bonds and shares.

"Options."

A similar observation on the ground of utility and important serviceableness obviously applies to every description of investment. Even the occasional use of bargains which are termed "options" (though I trust that no reader will ever venture upon the objectionable practice) may be mentioned in connection with large foreign contracts.