Bucket shop
The English term bucket shop to German as bucket shop describes an unofficial stock exchange on which a non-licensed brokers certain speculative offering.
United States
Bucket shops were mainly in North America at the end of the 19th and beginning of the 20th century. You could buy shares listed on Wall Street there at past prices, but the purchase orders were never executed on the real stock market. There was also a box (bucket) into which the securities orders were placed. The courses were "chalked" over them. The broker offset the purchases against the sales. For example, he could offset a buy order for $ 10 against a sale for $ 9 and made a profit of $ 1. As long as his displayed prices were within the daily fluctuation range of a share, the fraud did not fly.
Bucket shops only require low margin payments. If a share moved in the opposite direction by this amount, the customer's shares were “sold” - forcibly sold after a margin call , so to speak . The customer then lost his money.
The owner of the shop knew the contents of his box. In this way he was able to adapt the recommendations of his notice board “in line with the market”.
Until the stock market crash in 1929, such transactions were quite common. Some managed to assert themselves against this business model, for example Jesse Livermore .
Austria
According to § 48 of the Stock Exchange Act, the event and participation in an angle stock exchange is a criminal offense.
Individual evidence
- ↑ Bucket shop dict.cc German-English dictionary, accessed on June 21, 2016
- ↑ bucket shop The free Dictionary, accessed June 21, 2016
- ↑ Winkelbörse onpulson Wirtschaftslexikon, accessed on June 21, 2016
- ↑ Stock trading in bucket shops. Jesse Livermore's Early Trading Career.Retrieved June 21, 2016.
- ↑ § 48 BG RIS , accessed on June 21, 2016