That was a great book from a different era that will never return. He left the family farm at 14 and ran away to NYC to make it on his own. Try that today. I learned about bucket shops. It was fun to hear about those black gentlemen that eavesdropped on the telegraph messages being recorded, ran to the desk and made trades before they could be posted on the board....lol And taking 2 days to drive from Boston to NYC and being blacklisted from NYC because he made too much money...... Jesse Livermore was a unique individual. It was too bad he had 3 divorces and committed suicide.
Why? He would be dead by now anyway. It's all part of the story. Good with the bad. And after all much of the book probably is just that - a story.
here's the context and the answer to your questions is at the end. ""The only way I can hit any of these short sports is through their pocketbook. I can't touch him in St. Louis just now, but some day I will." And I told McDevitt my grievance. "Well," says old Mac, "he tried to connect here in New York and couldn't make it, so he's opened a place in Hoboken. The word's gone out that there is no limit to the play and that the house roll has got the Rock of Gibraltar faded to the shadow of a bantam flea." "What sort of a place?" I thought he meant pool room. "Bucket shop," said McDevitt. "Are you sure it's open?" "Yes; I've seen several fellows who've told me about it." "That's only hearsay," I said. "Can you find out positively if it's running, and also how heavy they'll really let a man trade?" "Sure, sonny," said McDevitt. "I'll go myself tomorrow morning, and come back here and tell you." He did. It seems Teller was already doing a big business and would take all he could get. This was on a Friday. The market had been going up all that week -- this was twenty years ago, remember -- and it was a cinch the bank statement on Saturday would show a big decrease in the surplus reserve. That would give the conventional excuse to the big room traders to jump on the market and try to shake out some of the weak commission-house accounts. There would be the usual reactions in the last half hour of the trading, particularly in stocks in which the public had been the most active. Those, of course, also would be the very stocks that Teller's customers would be most heavily long of, and the shop might be glad to see some short selling in them. There is nothing so nice as if catching the suckers both ways; and nothing so easy with one-point margins. That Saturday morning I chased over to Hoboken to the Teller place. They had fitted up a big customers' room with a dandy quotation board and a full force of clerks and a special policeman in gray. There were about twenty-five customers. I got talking to the manager. He asked me what he could do for me and I told him nothing; that a fellow could make much more money at the track on account of the odds and the freedom to bet your whole roll and stand to win thousands in minutes instead of piking for chicken feed in stocks and having to wait days, perhaps. He began to tell me how much safer the stock-market game was, and how much some of their customers made -- you'd have sworn it was a regular broker who actually bought and sold your stocks on the Exchange and how if a man only traded heavy he could make enough to satisfy anybody. He must have thought I was headed for some pool room and he wanted a whack at my roll before the ponies nibbled it away, for he said I ought to hurry up as the market closed at twelve o'clock on Saturdays. That would leave me free to devote the entire afternoon to other pursuits. I might have a bigger roll to carry to the track with -- if I picked the right stocks. I looked as if I didn't believe him, and he kept on buzzing me. I was watching the clock. At 11:15 I said, "All right," and I began to give him selling orders in various stocks. I put up two thousand dollars in cash, and he was very glad to get it. He told me he thought I'd make a lot of money and hoped I'd come in often. It happened just as I figured. The traders hammered the stocks in which they figured they would uncover the most stops, and, sure enough, prices slid off. I closed out my trades just before the rally of the last five minutes on the usual traders' covering. There was fifty-one hundred dollars coming to me. I went to cash in. " ----------------- the decrease in reserves means that they will jump on the maket to push it DOWN - so short it and then after they shake out all the little traders who only have a 1 point margin they ramp it back up. Jesse anticipates this sells covers his shorts and closes out before the rally to the bell.
"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor. ” — Jesse Livermore, How To Trade In Stocks
Yes! This is the answer that I was hoping for. My confusion was due to misunderstanding these two phrases: 1. jump on the market. I misunderstood this idiom to mean jumping on an opportunity, as in, "I just overheard that there's free beer at McCalloughans from 5-7pm tonight. We'd better jump on it!" The meaning here is more accurately described as suppress the market. 2. big room traders. Here I thought big room traders meant biggest traders in the room; e.g. wealthiest traders. Here, he means traders working for the house. So, since the market went up all week, the house surplus was going to be low, and the house was not happy about it. Traders working for the house ("big room traders") would short, to manipulate the price down ("jump on the market") for the popular stocks. This would wipe those with narrow (1-point) margins who were holding long. Thank you. I'll be sure to keep you in the loop when my next big tip comes along.
Become an accountant and get all the inside info for free. Or if you don't fancy 5 years of hard, boring work then get a job in an accountant's office clearing up and run a book there.
I vaguely remember that part of the book. Basically the real traders would work with bucket shops to blow out I think big room traders refer to the large traders on the street (today it would be the guys at Goldman and citadel). Teller was a bucket shop who was effectively betting against his clients (like fxcm). He wants the real traders to move the stock prices around so that they create a frenzy in his bucket shop (people placing more bets) and eventually everyone gets stopped out. If I remember correctly Teller is a little corrupt and tries to move a print on the nyse to stop out Livermore.