Everybody's Guide to Money Matters: with a description of the various investments chiefly dealt in on the stock exchange, and the mode of dealing therein by William Cotton
page 82 of 144 (56%)
page 82 of 144 (56%)
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in, under constantly changing circumstances,
the number of transactions, and the amount of money changing hands, involve intricate accounts and arrangements, which need not be particularised here. Accounts are settled fort- nightly, the precise dates being fixed some time before by the Committee of the house. Many speculators, however, especially those who have bought stocks and shares with the expectation that they will speedily rise in price, do not find it convenient to pay the purchase- money on the appointed settling day; so pay- ment may, by arrangement, be carried over to the next settling day. For the accommodation a certain charge, which is called "contango," is made, the amount varying with the value of money and the quality of the stock. "Back- wardation," on the other hand, is a commission paid in order to postpone the delivery of stocks or shares which a speculator contracts to sell, but which he never possessed. He is a specu- lator for the fall, hoping by the delay to be able to purchase the same stocks and shares at a less price than he bargained to sell them for, and so make a profit out of the transaction. Specu- lations for a rise are known on the Stock Exchange as "Bulls," and their object is by every manner of means to get the prices of the stocks they are dealing in pushed up as much |
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