Omaha daily bee., 1910-02-06
HARDEST CAME IN STOCKS
Floor Trader in Wall Street and
His Ways.
QUICK TURNS COUNTED ON
Form of Speculation Wearing on the
Nerves, EHhausting Physically,
Trying Mentauy-Fcnts Told
Of the Experts.

Hooking Coal and Iron stock recently IL
became known that floor traders had lost
upward Of $500. OOO, JOY was unconfined
among the traders and spectators in
stocks who have not the privilege OF the
floor. When on the following day IL
came out that a specialist had gone down
IN the crash the feelings Of outside traders
grew exuberant and enthusiastic. There
was even talk Of fireworks and martial
music to celebrate the occasion.
The joyful feeling was not characteristic
\ OF Wall street sentiment whenever men
lose large sums OF money. Even in the
hard gained financial district there is
sympathy, albeit seldom help, for men who
suffer costly reverses. This was a special
occasion. 1t was unique in Wall street
history in that the big losses we're Of the
classes that go to make up the so-called
professional element on the Stock ex-
change. Undoubtedly every one of the
Jubilant outside traders had at one time
or another suffered losses which he at
tributed to the operations of the profess
sionals.
The professional is a manipulation, a
floor trader or a specialist, or all three in
one. AS a manipulation he may conduct his
operations outside the exchange and may
or may not have exchange membership.
But the floor traders and specialists are
distinctly Stock exchange creations. They
must be members of the exchange and their
business is done within those doors Of the
exchange which are closed to the public.
Members of the Exchange.
The Stock exchange has 100 members Of
whom about 200 are actively engaged in
the brokerage business. OF the ZOO active
members, 1875 are listed In the Stock ex-
chang directory as men having no offices
OF their own. They are put down as brok-
ers at the office of one firm or another
and at the address given they have simply
desk room where they may make up their
sheets and where others may find them
for the settlement of their accounts.
These 1856 and some fifty more, who have
small offices for clearance purposes only.
comprise the unattached contingent to
which the floor traders belong. Many of
them do business simply as 50 brokers';
that is, as brokers who execute orders for
other brokers for a small portion of the
commission which the others charge and
take few or no chances on the market.
Others do a 81 business and trade on their
own account as we'll. Still others refuse
all commission business, whether from
members of the exchange or others, and
take chances on every trade they make.
These last are the real gamblers Of the
Stock exchange, IL not of the world.
The number Of the big floor traders is
not large, for the reason that their game
Is the hardest game that is known, the
most wearing on the nervous system. the
most exhausting physically, the most try
Ing mentally. Most of the active brokers
have tried the game and have been will
ing to leave it to others. In most cases
losses have dio0On0arta1 ftba,, 80 -
have thought 1t more prudent to pursue
the safe and sure commission. Only in an
exceptional case. like that Of the late e..
II. Hartman, has a successful floor trader
OF the first order left the floor to engage
In other business.
over other traders the floor trader has
the advantage that he pays no commits
slons, being a member Of the exchange.
that his position on the floor enables him
to keep the closest track of the market
and that he has had long experience in
the execution Of orders. His disadyan-
tages are that the operator outside Sc
cures first news of market DEVELOPMENTS
of Importance and that many market
movements planned from the outside leave
him out OF consideration.
Deal In Fluctuations.
The floor traders, or professionals"
said the report of the Hughes commission
on Stock exchange practices, "keenly study
tho markets and the general conditions Of
business and acquire early Information
which affects the value OF securities. From
their familiarity with the technique of
dealings on the exchange and ability to
act In concert with others and thus ma
nipulate values, they are supposed to have
special advantages over other traders"
In the opinion Of about every one with
Wall street experience tina the Hughes
commission erred in this analysis. The
floor trader doesn't study the general
cofoition OF business" He studies quota
lions for stocks and bonds. He does not
know or does not care about the intrinsic
value OF a security; its market value is his
cor Germ.
1t is Of no interest to him that a railroad
president is building up his company. but
If a railroad president is buying the stock
Of his company. the floor trader will nay
high for the information. A company may
BE amassing a big surplus; what OF It, the
Insiders are not buying the stock? A COM
pany may be pointed straight toward the
hands of receivers; It makes no difference
II the insiders are not selling the stock.
Equities I'm stocks.'' one of them said
scornfully. What do I care about them?
My business is to deal In fluctuations"
But in regard to the ebb and flow OF
market prices no one compares with tho
experienced floor trader in judgment of the
markets swings. He studies what WAN
street calls the technical position OF the
market; strives to learn, for instance, when
a bull pool is becoming weak. when wealthy
men have distributed their holdings among
outside Spectators. when the customers OF
brokerage offices are pyramiding profits
or trading on thin margins. or when pow
erful banking interests have withdrawn
supporting orders.
Great AlertneSs Required.
. II conditions like these exist the floor
trader sells the market aggressively in the
hope Of dislodging weakly held stocks. II
opposite conditions prevail he buys them
Just as aggressively and confidently.
There is no sentiment I'm his trade. He is
a bull or a bear according to the occasion.
except that he Is more often beartsh for
the reason that 1t is cheaper TO sell stocks
short than to buy and carry them. The
trader short of the market escapes the
compound interest charges which must be
borne by him who Is long.
In the execution OF buying ana selling