Reminiscences of a Stock Operator. Lefèvre Edwin

put up a point margin and double my money in a jiffy; or I’d take half a point. On one or two hundred shares a day, that wouldn’t be bad at the end of the month, what?

      The practical trouble with that arrangement, of course, was that even if the bucket shop had the resources to stand a big steady loss, they wouldn’t do it. They wouldn’t have a customer around the place who had the bad taste to win all the time.

      At all events, what was a perfect system for trading in bucket shops didn’t work in Fullerton’s office. There I was actually buying and selling stocks. The price of Sugar on the tape might be 105 and I could see a three-point drop coming. As a matter of fact, at the very moment the ticker was printing 105 on the tape the real price on the floor of the Exchange might be 104 or 103. By the time my order to sell a thousand shares got to Fullerton’s floor man to execute, the price might be still lower. I couldn’t tell at what price I had put out my thousand shares until I got a report from the clerk. When I surely would have made three thousand on the same transaction in a bucket shop I might not make a cent in a Stock Exchange house. Of course, I have taken an extreme case, but the fact remains that in A. R. Fullerton’s office the tape always talked ancient history to me, as far as my system of trading went, and I didn’t realise it.

      And then, too, if my order was fairly big my own sale would tend further to depress the price. In the bucket shop I didn’t have to figure on the effect of my own trading. I lost in New York because the game was altogether different. It was not that I now was playing it legitimately that made me lose, but that I was playing it ignorantly I have been told that I am a good reader of the tape. But reading the tape like an expert did not save me. I might have made out a great deal better if I had been on the floor myself, a room trader. In a particular crowd perhaps I might have adapted my system to the conditions immediately before me. But, of course, if I had got to operating on such a scale as I do now, for instance, the system would have equally failed me, on account of the effect of my own trading on prices.

      In short, I did not know the game of stock speculation. I knew a part of it, a rather important part, which has been very valuable to me at all times. But if with all I had I still lost, what chance does the green outsider have of winning, or, rather, of cashing in?

      It didn’t take me long to realise that there was something wrong with my play, but I couldn’t spot the exact trouble. There were times when my system worked beautifully, and then, all of a sudden, nothing but one swat after another. I was only twenty-two, remember; not that I was so stuck on myself that I didn’t want to know just where I was at fault, but that at that age nobody knows much of anything.

      The people in the office were very nice to me. I couldn’t plunge as I wanted to because of their margin requirements, but old A. R. Fullerton and the rest of the firm were so kind to me that after six months of active trading I not only lost all I had brought and all that I had made there but I even owed the firm a few hundreds.

      There I was, a mere kid, who had never before been away from home, flat broke; but I knew there wasn’t anything wrong with me; only with my play. I don’t know whether I make myself plain, but I never lose my temper over the stock market. I never argue with the tape. Getting sore at the market doesn’t get you anywhere.

      I was so anxious to resume trading that I didn’t lose a minute, but went to old man Fullerton and said to him, “Say, A. R., lend me five hundred dollars.”

      “What for?” says he.

      “I’ve got to have some money.”

      “What for?” he says again.

      “For margin, of course,” I said.

      “Five hundred dollars?” he said, and frowned. “You know they’d expect you to keep up a 10 per cent margin, and that means one thousand dollars on one hundred shares. Much better to give you a credit —

      “No,” I said, “I don’t want a credit here. I already owe the firm something. What I want is for you to lend me five hundred dollars so I can go out and get a roll and come back.”

      “How are you going to do it?” asked old A. R.

      “I’ll go and trade in a bucket shop,” I told him.

      “Trade here,” he said.

      “No,” I said. “I’m not sure yet I can beat the game in this office, but I am sure I can take money out of the bucket shops. I know that game. I have a notion that I know just where I went wrong here.”

      He let me have it, and I went out of that office where the Boy Terror of the Bucket Shops, as they called him, had lost his pile. I couldn’t go back home because the shops there would not take my business. New York was out of the question; there weren’t any doing business at that time. They tell me that in the 90’s Broad Street and New Street were full of them. But there weren’t any when I needed them in my business. So after some thinking I decided to go to St. Louis. I had heard of two concerns there that did an enormous business all through the Middle West. Their profits must have been huge. They had branch offices in dozens of towns. In fact I had been told that there were no concerns in the East to compare with them for volume of business. They ran openly and the best people traded there without any qualms. A fellow even told me that the owner of one of the concerns was a vice president of the Chamber of Commerce but that couldn’t have been in St. Louis. At any rate, that is where I went with my five hundred dollars to bring back a stake to use as margin in the office of A. R. Fullerton & Co., members of the New York Stock Exchange.

      When I got to St. Louis I went to the hotel, washed up and went out to find the bucket shops. One was the J. G. Dolan Company, and the other was H. S. Teller & Co. I knew I could beat them. I was going to play dead safe – carefully and conservatively. My one fear was that somebody might recognise me and give me away, because the bucket shops all over the country had heard of the Boy Trader. They are like gambling houses and get all the gossip of the profesh.

      Dolan was nearer than Teller, and I went there first. I was hoping I might be allowed to do business a few days before they told me to take my trade somewhere else. I walked in. It was a whopping big place and there must have been at least a couple of hundred people there staring at the quotations. I was glad, because in such a crowd I stood a better chance of being unnoticed. I stood and watched the board and looked them over carefully until I picked out the stock for my initial play.

      I looked around and saw the order-clerk at the window where you put down your money and get your ticket. He was looking at me so I walked up to him and asked, “Is this where you trade in cotton and wheat?”

      “Yes, sonny,” says he.

      “Can I buy stocks too?”

      “You can if you have the cash,” he said.

      “Oh, I got that all right, all right,” I said like a boasting boy.

      “You have, have you?” he says with a smile.

      “How much stock can I buy for one hundred dollars?” I asked, peeved-like.

      “One hundred; if you got the hundred.”

      “I got the hundred. Yes; and two hundred too!” I told him.

      “Oh, my!” he said.

      “Just you buy me two hundred shares,” I said sharply.

      “Two hundred what?” he asked, serious now. It was business.

      I looked at the board again as if to guess wisely and told him, “Two hundred Omaha.”

      “All right!” he said. He took my money, counted it and wrote out the ticket.

      “What’s your name?” he asked me, and I answered, “Horace Kent.”

      He gave me the ticket and I went away and sat down among the customers to wait for the roll to grow. I got quick action and I traded several times that day. On the next day too. In two days I made twenty-eight hundred dollars, and I was hoping they’d let me finish the week out. At the rate I was going, that wouldn’t be so bad. Then I’d tackle the other shop, and if I had similar luck there I’d go back to New York with a wad I could do something with.

      On