Reminiscences of a stock operator (Bucketshops)

[questroizac]

I have been re-reading Reminiscences of a Stock Operator for quite a while, in other words,
I read it every second month. Anyway, I came across a very meaningful statement on page. 259, para. 2;

Quoting:

"..As I look back and consider what were the common practices twenty-fice years ago when I first came to Wall Street, I have to admit that there have been many changes for the better. The old fashioned bucket shops are gone, though bucketeering -'brokerage' houses still prosper at the expense of men and women who persist in playing the game of getting rich quick. The stock exchange is doing excellent work not only in getting after these out-and-out swindlers but in insisting upon strict adherence to it's rules by its own members"

My questions being.

Do you think that, the 'bucket shops' the writer was refering to then, +50yrs ago, are the equivalents of what we have in our time now, eg: Schneiders, CMC Markets, GFT, to name but a few?

".....prospering at the expense of men and women who persist in playing the game of getting rich quick!"

 

[donaldduke]

"Wall Street never changes, the pockets change, the suckers change, the stocks change, but Wall Street never changes, because human nature never changes." ---Jesse Livermore

 

[shadowninja]

The difference is that bucket shops pretend to invest your money; with the companies you mentioned, everyone knows they're just taking your money and not actually buying shares, gold, oil, euros...

 

[jm99]

Do you think that, the 'bucket shops' the writer was refering to then, +50yrs ago, are the equivalents of what we have in our time now, eg: Schneiders, CMC Markets, GFT, to name but a few?

yes, some of the spreadbetting firms take the oppsite side of the small retail punter ie not place a trade in the market or hedge the position,

 

[questroizac]

Thanks for the replies coming in. Grant, I am waiting for your opinion on this one!

 

[nine]

These are not opinions.

Spreadbetters and their like are bucketshops. Why? Because they take your money and either cover it with someone higher up the betting chain (perhaps the market, perhaps some villain) and they have the ability to manipulate the spread and the price (why do you think they often use equivalent but not exact names for market indices).


They fill a valuable role in our ecosystem: getting the little suckers' cash. But they only really exist strongly in the UK where, for some reason, the government seems to encourage them with the tax free exemption. Perhaps in the UK the old tradition of the upper class scamming money from those who deserve to be scammed provides an ethical framework for the spreadbetters.

 

[Mayfly]

They fill a valuable role in our ecosystem: getting the little suckers' cash.

It's pretty much as Nine says - so, think Jurassic Park and you're next up (as in being served) as lunch! Bet small if you must (don't do size) and focus on much you'll lose if it all goes wrong! And, it will!

HTH

Cheers

Mayfly

 

[Mr.J-Arthur]

Ha, I hear so much about spread betting. Sounds like a bucket shop-sort-of-gig to me.
I'm a yank, what do I know? I wouldn't want to spread bet, sounds almost like blackjack?

 

[questroizac]

Thanks everyone for all your contributions. I have always had a second thought about these spreadbetting joints, and just like what nine said, they're quite a lot in the UK than in other country in the EU. And the most discouraging thing, is how the individual shops gets started. Have you ever been curious enough as to do any sort of research about the owners, their pasts, and so forth, damn! There's one "well-known" spreadbetting firm I know who the founder used to be a "potato" farmer in Surrey. (No names here!) Just woke up one day with an idea, and ta-dah, "I am going to start a spread betting joint!" How amazing. I think trading in most of these joints is as good as putting your money in a marked "TO WHOM IT MAY CONCERN" envelope, and just leaving the package on the street.

 

[Mr.J-Arthur]

"betting" is gambling and that means the house has the edge in most cases.
Just trade the markets with a legit ECN style broker.