JOBBER (STOCK EXCHANGE). Every member or applicant for re-election, admission, or re-admission to the Lon don Stock Exchange must declare to its committee whether he proposes to act as a broker, a dealer, or a clerk. No member or authorized clerk is allowed to carry on business in the double capacity of broker and dealer. A dealer may not deal for or with a non-member of the Stock Exchange : he cannot, that is to say, buy or sell for a client outside the Stock Exchange. Part nerships between brokers and dealers are prohibited. The Stock Exchange dealer is nearly always termed a jobber, but the Stock Exchange rules, from which the foregoing statements are ex tracted, hardly use the word jobber, familiar as it is through use during more than a century. Put simply, the London Stock Exchange rules forbid jobbers to deal with anyone except a broker, or an authorized clerk, a fellow-jobber, while a broker acts as an agent between members of the public and members of the Stock Exchange.
While the broker acts as inter mediary or agent, the jobber's status is that of a principal. He buys from one man the securities that he hopes to sell to another ; or he sells in the expectation of being able to replace the stock or shares at a lower figure. He has to deal in the dark, for the broker who approaches him with business in those shares in which he, the jobber, specializes, does not say whether the order is to buy or to sell. This is the reason for the double prices always quoted in the Stock Exchange. The jobber, in making a price, thereby commits himself to buy at the lower or to sell at the higher of the two prices mentioned. He is not compelled to make a price. In times of panic, when sellers greatly preponderate, it might be financial suicide for a jobber to continue making prices in stocks that he could feel practically certain would be sold to him, though he himself had little chance of finding buyers. In booming markets, he hesitates to continue making prices in some shares of which there may be only a scanty supply, since the brokers, acting for the public, would insist upon buying if he made a price. In the case of a slump, the jobber might find himself with much more stock than he wanted ; in a boom, he might be left in the position of having sold shares that he could not get back again.
Such being the possible conditions in a Stock Exchange slump or boom, it will be seen that the jobber makes a book, and that this book may lead either to profit or to loss. The prices that the jobber makes are regulated mainly by the public supply and demand. If the jobber finds himself being left with more shares than he sells, he lowers his price; if he keeps on selling shares in response to demand, he puts it up, hoping to induce people either to buy from him or to sell to him, as the case may be. He is running risks all the time, through the system of making a price and not knowing whether he will be called upon to take, or to supply, the stock. If, having sold
isoo War Loan to a fellow-member, he could be certain that his next bargain would be the purchase of £500 of the same stock at a fraction below the price of his previous sale, all would be plain-sailing; but uncertainty waits upon every bargain that a jobber books. There may be a profit : the double price gives the jobber room in which to turn round. On the other hand, the transaction may easily end in loss to the jobber. He takes the rough with the smooth and hopes that the profits will outweigh losses. If they did not, there would soon be no jobbers; but in a market where prices are moving rapidly under the influence of substantial public orders to buy or sell, or both, the jobber stands to be "shot at," as the expressive phrase goes. He frequently has the unpleasant experience of finding that, at the end of a day's heavy business, all the profits that he has made on jobbing are swallowed by a loss on his book : he may have bought more, on balance, than he has sold and the price has moved down against him; or he may have sold, and been unable entirely to replace, shares that have risen in price at the end of the day.
Whereas the Stock Exchange broker receives orders in stocks and shares of every description, the jobber confines his book to a specialized market. If he deals in Coat, he will not touch Canadian Pacifies. The dealer in Shell Transports has nothing to do with British Celanese. Where there are partners in a firm of jobbers, some of them will prob ably act in various markets, but one man confines his attention to a particular class or set of securities. He studies the companies, knows the brokers who are likely to be buyers or sellers of his own special shares, and may keep a stock of these shares on his book for the brokers who, he hopes, will come and buy them from him on behalf of their clients. Experience gives him a sense of possible movements, rise or fall; though, in practice, even experience can prove a very misleading guide. As a prin cipal, liable to make either loss or profit, the jobber is not tied down by any official scale of minimum remuneration. He makes what he can, competition serving to keep the "turns" within reasonable limits. The jobber's life involves more risks, more excitement, and more stagnation—according to the state of pub lic interest in the jobber's market—than the life of a broker. The jobber has shorter hours than the broker, his expenses are on a more modest scale, and the drudgery is much less ; but the fact that a census of London Stock Exchange members usually reveals about the same number acting in each class proves that the profits are divided more or less evenly between brokers and jobbers. (\V. L.)