When the broker, armed with his client's order, goes to the market in which it can be executed, and confronts the jobber with whom he usually deals because he finds he does his business best, he asks the jobber to make him a price in the stock concerned. He does not say he wants to buy it, for that would tempt the jobber to make the price high; he does not say he wants to sell it, for that would tempt him to make it low. The jobber would not, of course, give an out-of-the-way quotation, for the broker knows the market price almost as well as he does, but he might be tempted to vary the price by a fraction. As it is, the jobber names two prices, one at which he will sell and one at which he will buy. Suppose it were the Deferred Stock of the Midland Railway Company, the jobber might quote 69-70, meaning that he would buy the stock at 69 or sell it at 70. The broker would probably think that this price was too wide and might say so, implying that the jobber ought to be prepared to buy at a higher price and sell at a lower one. There are jobbers standing near who would like the business and who would make a narrower price. At last, without much haggling, for there is little of that in the Stock Exchange, the quotation 69-3/8-69-5/8 may be obtained. The broker need not have to ask for the price at all, the jobbers may be shouting that they are willing to buy or sell at a certain price, or that they are willing to deal either way. At all events, the broker being content with the quotation 69-3/8-69-5/8, and being commissioned to buy, informs the jobber that he buys so much stock from him at 69-5/8.

It is possible that the jobber would rather have bought, but once having made the price, he must, of course, carry out the transaction. When the broker confronts him, he may say he is only a buyer or only a seller of Midland Deferred, but of course, in refusing to deal either way he risks losing the order. Or he may make a price so wide, especially in a stock in which there is not a free market, as to protect himself amply. For instance, while the jobber was quoting 69-3/8-69 for Midland Deferred in the Home Railway Market, another jobber in the Foreign Market may have been quoting 74-78 for Servian Bonds. He would not buy them from the broker's client at a higher price than 74, and he would not sell them at a lower price than 78. Such a quotation provides an ample margin for what is called the jobber's turn, that is, the profit he expects to make by buying and selling the same stock, as a merchant. Wide quotations, which prevail in stocks that are not often dealt in, and even in stocks that are in times of panic, merely mean that the price the client has to pay is high, whilst the price he will receive for the same stock is low. The more enterprising the jobber, the narrower the prices he will make. Of course, in making a price the jobber does not undertake to deal in any abnormal amount of stock. There are limits which are understood where the broker does not state the amount in which his client desires to deal. In the case of our Midland Deferred Stock, a thousand pounds' worth is understood when no amount is mentioned.

However, when the broker signifies that he has bought the stock, nothing in the way of a voucher passes between him and the jobber. The transaction may be completed with a nod, the bargain is jotted down by each party in their respective dealing books, and one of them may, indeed ought, to mark the price at which the business has been done on a board provided for the purpose, so that it may appear in the next edition of the Official List issued to the public. It is very seldom, however, comparatively speaking, that the price is thus recorded. Indeed, it is said that many members only record it when they feel they have made a bad bargain, and want to convince the outside client that the stock has actually been dealt in at that price. Probably, however, the omission to mark business done merely arises from a desire to save time and trouble, and it might occur less frequently if arrangements were made to obviate the necessity of walking a considerable distance to one of the boards provided. The bargain is not checked until the next morning, when, in the room below the Stock Exchange, the clerks of the jobbers and brokers meet for the purpose.

The first official intimation the client receives that his order has been executed is the receipt from his broker of a contract note. This contract note bears the date of the transaction, the name and address of the broker, and the statement that the amount of stock has been bought at the price named. To the amount payable by the client for the stock is added the amount of the broker's commission, called brokerage, and an item comprising the amounts payable for Government stamp duties and for registration in the books of the company. The Government stamp duties are: first, the amount payable on the contract—sixpence on all sums between £5 and £100, 1s. from £100 to £500, 2s. from £500 to £1000, and so on, according to a sliding scale, up to £1 for transactions exceeding £20,000; and secondly, the tax on the conveyance of ownership, which is at the rate of sixpence for every £5 up to £25; then 2s. 6d. for each additional £25 or part up to £300; 5s. for every additional £50 or part of £50 afterwards. The registration fee is charged by the company for the trouble of registering the name of the buyer in its books, and varies somewhat, but is usually half-a-crown. The contract note also reminds the client that the transaction is subject to the rules, regulations, customs, and usages of the Stock Exchange, and it sets forth the date when the money is payable—the date of the Stock Exchange settlement.

Until the time of settlement arrives, the client enjoys credit. Although he is not really the holder of the stock until he has paid for it at settlement time and received the certificate, he could sell it if the price rose and pocket the profit—by the way, his broker would charge him only one commission, for both buying and selling, if he sold the stock, which he had bought, before the settlement day arrived. The credit might extend over a fortnight if the stock were bought immediately after a settlement, or it might extend for only a day or two if bought immediately before a settlement. At all events, the buyer is in practical possession of the stock for some time before he pays for it, and that is why a broker requires an introduction with proper references, and, perhaps, even security, before he will enter into transactions for an unknown client. Cases have been known of people buying stock and carrying out the bargain faithfully, provided they can sell it at a profit before Settlement day arrives, and thus receive a cheque through the broker; whereas if Settlement day arrives before the price has risen, the buyer has vanished.

Another reason why a broker requires an introduction and references is because of the salutary Stock Exchange rule forbidding him to transact speculative business for any who are not principals without the knowledge of their employers. He may deal for such if they pay cash either with the order or when Settlement day arrives and take up the securities; but he may not aid them in transactions undertaken merely in the hope of snatching a profit by the sale of stocks and shares before they have been paid for. He may not carry over bargains for them from settlement to settlement in a manner which can be explained now that we have arrived at the question of Stock Exchange settlements.

If the client does not desire to carry over, the end of the transaction is promptly brought about. When settlement time arrives, the member who has bought the stock has to pass to the seller, on Ticket or Name day, a ticket bearing the name of the transferee and stating the name of the member who pays for the stock. Reference will be made later to the settlement and its three days. This passing of the ticket is the first step in the completion of the bargain, enabling the seller to see to whom he has to look for the money. If he does not receive the ticket by a certain fixed time—the hour differs in accordance with the nature of the security being transferred—he can have the stock sold out through a special official of the Stock Exchange; that is, he can find another buyer of the stock to replace the one who has not come forward, and the delinquent buyer has to make good the expenses and any loss arising from the process of selling out.

However, the ticket having been passed in the ordinary way, our buyer of Midland Deferred receives from his broker at settlement time a transfer form signed by the seller of the stock. This form, in which the deed of transfer is executed, varies according to the regulations of the particular company whose securities are concerned. But most companies now adopt what is called the common form. The terms of the form are quite simple. The transferor agrees, in consideration of a sum mentioned, to sell to the transferee so much stock or so many shares in the undertaking named, and the transferee agrees to accept them, subject to the conditions on which they were held by the transferor. Both parties have to sign and seal the document. One main object of having the signature of the transferee is, of course, to place on record his acceptance of liability for any uncalled capital which may be attached to the shares. The duty of preparing the transfer form falls upon the seller or his broker, and it may be pointed out that the consideration money named in the deed, as paid by a buyer, is by no means necessarily the price the seller will receive; the stock may have changed hands over and over again at different prices, and the amount mentioned is that paid by the ultimate buyer. It is inserted in the deed because the law requires that the stamp duty shall be assessed on this amount. For the benefit of the seller who may be unaware of the reason why he is required to put his signature to what appears incorrect, a note is usually appended to the ordinary form of transfer explaining this fact.

Having prepared the deed and obtained his client's signature thereto, the selling broker proceeds to hand it, with the seller's stock or share certificate, to the broker of the ultimate buyer, and if these documents are duly delivered on Settling day, or within the ten days' grace allowed thereafter, the buyer is bound by the rules of the Stock Exchange to complete his bargain by handing over the agreed purchase money. But it sometimes happens that a stockholder has a certificate for a larger holding than the amount he is selling, and may not therefore care to part with his certificate. Having sold only part, he prefers not to give up, even temporarily, the whole. In this case, his broker, before parting with the transfer, will forward it with the certificate to the secretary of the company, who will then make a note on the transfer to the effect that a certificate for stock to the amount mentioned in the transfer has been deposited at the company's office, and will forward to the seller a certificate for the balance of his holding. There are, however, some companies which refuse to certify transfers in this way, in which case the duty will be undertaken by the Secretary of the Share and Loan Department of the Stock Exchange, if the original stock certificate is forwarded to the company through him. This certification of a transfer, either by the secretary of the company or by the Secretary of the Share and Loan Department, is by the rules of the Stock Exchange a valid substitute for the certificate itself. Although, as far as the seller is concerned, the formalities just mentioned constitute a valid delivery of the stock, the buyer does not legally possess the stock until his title has been recognised by the company. Having properly signed and sealed the transfer form, the buyer sends it through his broker to the office of the company for registration, with the stock certificate, unless that has already been forwarded. In due course he will receive from the company, through his broker, a stock certificate acknowledging that he has been registered in the books of the company. He is then the holder of the stock he has bought.