The London Stock Exchange

Transactions in public securities take place in London in the Stock Exchange, composed of about 1500 members, which alone have the right of entering the building and of closing contracts there.

The members of the house are divided into two classes, the ' brokers' and the ' jobbers.' The former simply execute the orders for purchases or sales given to them by their clients, the latter are dealers on their own account, buying when stock is offered and supplying the market when stock is demanded. A broker when asked the price of a security goes to a jobber who gives him two prices, one at which he is ready to buy, the other at which he is inclined to sell. It is, therefore, customary at London in quoting public securities to give two prices, one being the buying, and the other the selling price. The difference between these two prices depends on the market; for securities, which are easy of sale, it is 1/8 to 1/4 per cent., for those difficult of negotiation 1/2 to 1 per cent., and even more. The jobbers live upon what they can make out of these differences, called the ' turn of the market.'

Transactions in securities in London are always for the next ' selling day' unless it be specially agreed that they are for money. The prices quoted always refer to the next settlement; 'Consols,' however, are quoted both for the account and for cash. The settlement takes place twice a month towards the 15th and the 30th; for Consols, however, there exists only one settlement per month, about the 4th.

The bi-monthly settlement or liquidation extends over three days. The first day is the ' name day' for the declaration of options and contangoes; the second is the 'ticket day' for the transfer of registered stock; the third is the 'pay or settling day' for the delivery of stock and the settlement of accounts.

There are two 'making-up prices,' one for the 'name day,' the other for the 'ticket day,' The carrying over of stock is generally effected at the making-up price of the name day.

Besides the contracts for sales and purchases of securities, the Stock exchange recognises transactions in 'Options,' in which by the payment of a certain amount of money one party to the contract acquires the right of withdrawing from it. This right exists till a quarter to 3 p. m. on the ' name day' of the settlement for which the business was done. The following are the 'options' mostly dealt in:

'Call,' i.e. the right of buying a certain stock for a fixed time and at a fixed price. Those who acquire this right are said to be 'giving for the call; * those who concede it are 'taking for the call.'

The 'Put' is the right of selling a certain amount of any stock for a fixed time and at a fixed price. Those who acquire this right are said to be 'giving for the put,' those who concede it are ' taking for the put.'

The 'Put and Call' is the right of buying or of selling a certain amount of any stock for a fixed time and at a fixed price.

The 'Call of More' is giving the right to the purchaser of a certain amount of stock at a certain price for a fixed time of demanding of the seller the same amount at the same price.

The 'Put of More' is giving the right to the seller of a certain amount of stock at a certain price for a fixed time of delivering to the purchaser the same amount at the same price.