Other marks somewhat similar to ex dividend may appear against the
quotation in the Official List, such as ex rights, ex new, or ex all.
"Rights" may probably refer to the privilege which a holder of the
shares has of subscribing to shares in another company, a privilege
which enhances the value of the shares he holds. "New" may probably
refer to the privilege which a holder has of subscribing for new shares
in his own company. Sometimes the holder is entitled to both these
privileges, and perhaps others, besides the dividend; all these
privileges being referred to for abbreviation's sake as "all." A seller
of the shares after they are marked "ex" these privileges retains the
privileges, and consequently gets a lower price for the shares.
There is provided in the Official List against the name and quotation of
every security ample space for the record of the prices at which
business has actually been done during the day. This space is usually
blank. If the business done were accurately represented by the markings
in the List, the Stock Exchange would be an idle place indeed. Reference
has been made in a previous chapter to the reason for the blank
appearance of the "business done" column, and it is often urged that in
this matter there should be some reform. Many, indeed, go farther and
suggest that not only should the prices be recorded in the case of all
business transacted, but that means should be devised for placing on
record the total volume of that business, as is done in the New York
Stock Exchange. There day by day the public is informed as to the number
of shares that have been bought and sold; here no such record is kept.
Criticism has often been levelled against the Official List, too, on the
ground that its prices are so wide as to be valueless. When a stock is
quoted at, say, 106-109, no one who knows his Official List will suppose
for a moment that the stock can be bought by the jobber as low as 106
and sold as high as 109. The broker going to the jobber in the market
would obtain a much narrower quotation. Even if the student of the
Official List might conclude that as the stock is theoretically quoted
106-109, the practical price is round about 107-1/2, that is, midway
between the two, it would be something. But as a matter of fact, whilst
the stock is quoted 106-109, business may actually be done at 106-1/4 at
one time and below 107 all day.
Public-domain text, read in full here on John Shaqi.
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