Making It In The Old Time Bucket Shops
That bucket shop had my margin and Henry's, and there may have been a lot of other Sugar shorts in the office; possibly eight or ten thousand shares in all. Suppose they had $20,000 in Sugar margins. That was enough to pay the shop to thimblerig the market on the New York Stock Exchange and wipe us out. In the old days whenever a bucket shop found itself loaded with too many bulls on a certain stock it was a common practice to get some broker to wash down the price of that particular stock far enough to wipe out all the customers that were long of it. This seldom cost the bucket shop more than a couple of points on a few hundred shares, and they made thousands of dollars.
The Cosmopolitan, as I said, was my last resort. It was the richest bucket shop in New England, and as a rule they put no limit on a trade. I think I was the heaviest individual trader they had that is, of the steady, every-day customers. They had a fine office and the largest and completest quotation board I have ever seen anywhere.
It ran along the whole length of the big room and every imaginable thing was quoted. I mean stocks dealt in on the New York and Boston Stock Exchanges, cotton, wheat, provisions, metals everything that was bought and sold in New York, Chicago, Boston and Liverpool.
You know how they traded in bucket shops. You gave your money to a clerk and told him what you wished to buy or sell. He looked at the tape or the quotation board and took the price from there the last one, of course.
In the instance I speak of he sent thirty-five men to act as customers. They went to the main office and to the bigger branches. On a certain day at a fixed hour the agents all bought as much of a certain stock as the managers would let them.
He wrote that price and the time on your ticket, O.K.'d it and gave it back to you, and then you went to the cashier and got whatever cash it called for. Of course, when the market went against you and the price went beyond the limit set by your margin, your trade automatically closed itself and your ticket became one more scrap of paper.
In the humbler bucket shops, where people were allowed to trade in as little as five shares, the tickets were little slips different colors for buying and selling and at times, as for instance in boiling bull markets, the shops would be hard hit because all the customers were bulls and happened to be right. Then the bucket shop would deduct both buying and selling commissions and if you bought a stock at 20 the ticket would read 20-1/4. You thus had only 3/4 of a point's run for your money.
So I yelled at him: "Hey, Tom, what in hell are you waiting for? Mark the price on these tickets 103! Get a gait on!"
Well, on the day the thing happened that I am going to tell you, I was short thirty-five hundred shares of Sugar. I had seven big pink tickets for five hundred shares each. The Cosmopolitan used big slips with a blank space on them where they could write down additional margin. Of course, the -bucket shops never ask for more margin. The thinner the shoestring the better for them, for their profit lies in your being wiped.
Say, the distance from Tom's place to the cashier's cage "wasn't over eight feet. But I hadn't got to the cashier to get my money when Dave Wyman by the ticker yelled excitedly: "Gosh! Sugar, 108!" But it was too late; so I just laughed and called over to Tom, "It didn't work that time, did it, old boy? - 23204
The Cosmopolitan, as I said, was my last resort. It was the richest bucket shop in New England, and as a rule they put no limit on a trade. I think I was the heaviest individual trader they had that is, of the steady, every-day customers. They had a fine office and the largest and completest quotation board I have ever seen anywhere.
It ran along the whole length of the big room and every imaginable thing was quoted. I mean stocks dealt in on the New York and Boston Stock Exchanges, cotton, wheat, provisions, metals everything that was bought and sold in New York, Chicago, Boston and Liverpool.
You know how they traded in bucket shops. You gave your money to a clerk and told him what you wished to buy or sell. He looked at the tape or the quotation board and took the price from there the last one, of course.
In the instance I speak of he sent thirty-five men to act as customers. They went to the main office and to the bigger branches. On a certain day at a fixed hour the agents all bought as much of a certain stock as the managers would let them.
He wrote that price and the time on your ticket, O.K.'d it and gave it back to you, and then you went to the cashier and got whatever cash it called for. Of course, when the market went against you and the price went beyond the limit set by your margin, your trade automatically closed itself and your ticket became one more scrap of paper.
In the humbler bucket shops, where people were allowed to trade in as little as five shares, the tickets were little slips different colors for buying and selling and at times, as for instance in boiling bull markets, the shops would be hard hit because all the customers were bulls and happened to be right. Then the bucket shop would deduct both buying and selling commissions and if you bought a stock at 20 the ticket would read 20-1/4. You thus had only 3/4 of a point's run for your money.
So I yelled at him: "Hey, Tom, what in hell are you waiting for? Mark the price on these tickets 103! Get a gait on!"
Well, on the day the thing happened that I am going to tell you, I was short thirty-five hundred shares of Sugar. I had seven big pink tickets for five hundred shares each. The Cosmopolitan used big slips with a blank space on them where they could write down additional margin. Of course, the -bucket shops never ask for more margin. The thinner the shoestring the better for them, for their profit lies in your being wiped.
Say, the distance from Tom's place to the cashier's cage "wasn't over eight feet. But I hadn't got to the cashier to get my money when Dave Wyman by the ticker yelled excitedly: "Gosh! Sugar, 108!" But it was too late; so I just laughed and called over to Tom, "It didn't work that time, did it, old boy? - 23204
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