Quote from gokor89:
Can you please explain what a bucket shop is and what it does?
They make buckets... clearly.
The term comes from old brokerages houses in the days when quotes had to be called or wired about the country and clients had limited access to quote information.
Clients would place orders to buy or sell and the broker would just toss all the client orders in to a 'bucket' and 'fill' them at whatever price best suited the broker based on orders they could match up or if they could get a better price from the exchange and keep the difference.
You can see why it's used as a negative way to describe brokers...