Evening star., 1953-03-16

he wants to buy or sell when he asks for
price information, for he will hope to get
better price by bargaining. For instance,
one broker may offer to sell at 25h and
another will announce his willingness to
buy at 25A. Our man may then say he is
willing to pay 25M and conclude pur-
chase at that price with some other broker.
Once your order is executed, q report
OF the transaction is phoned back from
our Exchange booth to our Office and
Ross is advised by wire. He will then
phone you and tell you the exact price
paid for your stock. The whole operation
will have taken only matter of minutes.
HOtU Big Must An Order Be?
In this example we've assumed that you
ordered 100 shares because most stocks
on the Exchange are traded only in 100.
share units or round lors." But you can
buy in smaller units if you like-5 OF 10
or Is shares, any number from / to 50.
These are called ''odd lots
If you give broker market order for
10 shares of Typical, he must buy that
stock from an odd-lot dealer, who per-
forms kind of wholesaling function on
the Exchange by breaking round lots of
securities up into smaller packages. Such
odd-lot dealers do business only with
brokers on the Stock Exchange floor, not
with thepublic. Forrendering their whole
sale" service, they charge one-eighth Of q
point, or 12He, for every share of stock
they buy or sell at less than $40; 25f q
share for higher-priced stocks.
Apart from chat extra charge, you
wouldn't have to pay any more per share
on a 10-share order than you would on
100 shares, because the price at which your
odd-lot order is executed is always the
same as that which prevails on the next
round-lot sale of that security on the
Exchange.
Suppose Typical Manufacturing sells at
IS on the next round-lot transaction after
our broker places your 1O-share order with
the odd-iot dealer. Your stock then costs
you 25h per share-25 for the stock plus
18th to cover the odd-lot cost. If you were
selling Typical instead of buying at that
time you would get only 24N-the round
lot price of IS less 18th to cover the odd.
lot cost. d..
What Does 1t Cost to Buy and
Sell Stocks?
Reasonable commissions are charged on
all Stock Exchange transactions, and all
member firms charge exactly the same
standard scale of rates. These rates vary
with the size of the order and are little
less proportionately on big orders than
on small ones. Thus, the commission on
100 shares of Typical at Is would amount
to O9% of the purchase price while on 10
shares it would be 2.4%. Currently, the
Average commission on all Stock Exchange
transactions is less than 1%.
As soon as we complete purchase for
you, we send you bill, which shows ex-
actly what you bought, what price was
paid, what commission is due, what post.
age or tax, if any, is incurred, and what
total amount is due. We do not make any
charge for special services, such as research
or information or carrying an inactive &C.
count or safe keeping of securities, etc.
After you pay the bill you can obtain
the stock certificate which shows that so
many shares of Typical Manufacturing
Co. have been registered in your name
and that you are entitled to all rights,
privileges, and dividends due stockholders
in that company. But like an increasing
number of our customers, you may find
it more convenient to leave the certificate
in safe keeping with us at no charge. That
way you are protected against losing the
certificate, and it is right here whenever
the time comes that you want to sell the
stock.
What Do You DO If You Want
to KnOsc More?
We have tried here to answer some Of
the most common questions and provide
at least the essential guide posts for any
one who wants TO start an investment
program in order to get better return on
his extra savings.
Many other questions may occur to you.
What is short selling? What does it mean
to buy on margin? What is meant BY such
terms as debenture, ex-dividend, rights,
stock splits, stop orders, many Others.
These terms are defined in our booklet
f7OW 10 1uVSSI Suu VIC WOuio OC RAoo
to send copy to anyone who would Like
to pursue further the story of how this
stock and bond business works.
phlet form are GuGilable on request.
Lst aDrite or phone Dept. BB-9.
2CE, FENNER 4 BEANE
tors Of IsgsHmem SsessitiG
Is 1s1 Commolitiss
Equitable Building
BALTIMORE 2