Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-09-23
THE ERROR OF BROKERS.
Some Large Losses and Then Even 81
Profits Result From Mistakes.

Some Large Losses and Then Even 81!
Profits Result From Mistakes.
A broker penetrated the Grove
around the steel post on the stool
exchange the other day with writ
ten order in his hand to sell LOO
shares at price which was fraction
ally above the morket. Trading wa
quiet, and, as it did not seem likel.
that his figure would be reached fol
a few minutes at least, he paused t.
chat with another member. 1t hap
pened, however, that a number %
buying orders came in shortly, and th'
price was bid up rapidly. In the mids
Of the conversation the broker heard
1000 offered at his figure and h
called, like a flash, err take 1t.
Then he strolled leisurely toward hi
phone, to come to an abrupt stop be
fore he had taken a dozen steps.
He had bought instead of sold. Ye
the order was written in an entirely
Iegible hand, and he had entered tht
crowd to sell. 1t had been his ONLY
order at the time, so he could no
plead that he had confused two or
ders. He had thought OF nothing ex'
cept to sell 1000 shares of steel, ant
yet his record showed that he had
bought 1000 shares. "" >.
Being a seasoned dealer in securi'
ties and familiar with many curiou.
psychological happenings on the
board, he did not ponder the tricl
his mind had played. but went i'm.
mediately back to the post and SOLD
1000 shares Eat the market" The
price he obtained was an eighth be-
low what he had paid for the stock
He lost $125 by the transaction and
still had the original selling order tc
fill. Steel declined another eighth
and soon a quarter more. The whole
market began, then to look soft.
The broker decided not to wait any
longer and sold 1000 shares at 9
price half point below what he had
given for the shares he first bought
This was to fill the order. He had
learned that 1900 shares sold for the
price he had paid for his 1000, and
knew that the customer would take
1t for granted that 1000 Of the 1900
had been for his account. The broker
had to make good on his order, and
therefore, shouldered an aggregate
loss of 1925. offset by the $125 COM
mission. because his mind had beer
woolgathering for an instant.
The happening was not unusual. A
book Of interesting anecdotes, entitled
Brokers' Errors" could be written
from the experiences Of any half
dozen members of the exchange and
of the lot any one could be selected
as illustrative Of the difficulties Of the
brokerage trade. Mistakes, however
do not always prove costly; on the
contrary, money has frequently beer
made by a wrongly filled order.
Back in the days when American
sugar was wont to spring UP or dowr
more points in a day than many stocks
move in a month, a new member ap.
peared on the floor one morning with
an order to buy 1000 shares Of sugar
He was entirely unfamiliar with the
methods employed on the exchange
and was also extremely nervous ovei
his first days work. Just as he reach
ed the sugar crowd a thousand shares
were offered at his price, and he took
them without noting who the seller
was. Calling up his office few min.
utes later he said: II got that sugar.
YES" replied the clerk at the 9TH
er end of the wire, whats the name?
"Name?" queried the young broker
Sure, the name Of the man who
sold it to you."
The broker not only did not know
the name, but he also said he would
not be able to recognize the man be.
cause he had not looked at him es.
pecially.
well, you'll have to straighten II
out" the clerk said, and cut him off.
The broker was badly ratified. He
didn't know how to get trace Of his
man again, for the sugar post by this
time was surrounded by hundred
near -maniacs. So he decided to cance
the purchase, which he did by simply
tearing up his record slip, and then
he went back and bought another
/ 900 shares. ....
When his patrons found that after
noon that they were long" 1000
shares Of sugar that they did not
know anything about, there was some
excitement But 1t was forgotten
next day, when the stock was closed
out at a profit Of $500.
The heaviest loss to a stock ex-
change house ever reported as the re-
suit of mishap occurred on the day
Of the Northern Pacific corner, May
9, 1901. A broker went on the floor
that morning with an order to buy
200 shares of Northern Pacific. The
market opened in excited fashion
The broker kept bidding for his
shares, but, as the price advanced by
leaps and bounds. his bids fell con-
stantly behind selling prices. and be-
fore he realized 1t the market had got
away from him. Throwing caution to
the winds, he finally Did high enough
and got his stock-at $1,000 share.
the top price of the famous session.
The customer, naturally, objected
to paying 100000 for 200 shares of
stock, and the matter was finally
taken before the arbitration commit
tee of the exchange. Both sides Of the
matter were given. and the brokerage
firm was directed by the committee to
refund to the buyer $1S0,000.-New
vnrlx Tinnaa