Stocks with a Side of Wits: The Quirky World of Stockbrokers 📈
Once Upon a Stock Exchange…
Imagine wearing striped suits and using industrial-sized calculators circa 1985 London. Stockbrokers were prowling around the London Stock Exchange, but couldn’t actually “own” any of the stocks they were trading. They were like chefs who could sauté stocks but couldn’t taste their own broth. These heroes in pinstripes were exclusively earning commissions from clients, adhering to a strict code that forbade them from trading for themselves or acting as principals.
The Big Bang Theory (Not the Show, Folks!) 💥
Fast forward to October 1986, and the Big Bang happened—not the kind featuring theories about the Universe but a dazzling dismantling of the Stock Exchange’s rigid rules. Stockbrokers could suddenly act as principals, hence new terms like “market makers” started floating around. And surprise, surprise, those fixed commissions went the way of neon socks and vinyl records.
The Competitive Stockbroker Arena
Nowadays, Stockbrokers are in gladiatorial competition for commissions. They can trade for their own accounts, give investment advice, and even charm institutional investors with words affairs. Nostalgic about their older dignified selves? Maybe, but time marches on, my dear investors!
graph TD;
A[Client] -->|Buys Securities| B[Stockbroker];
B -->|Market| C[Stock Exchange];
B -->|Receives Commission| A;
B -->|Trades| D[Market Maker];
D -->|Market| C;
The Stockbroker’s Cheat Sheet
Formula for Fun
Securities + Time = Commission. It’s as simple as that; thank us later!
Investment (Mathematical) Ratios
-
EPS (Earnings per Share): $$EPS = \frac{Net , Income}{Outstanding , Shares, of ,Common ,Stock}$$
-
P/E Ratio (Price-Earnings Ratio): $$P/E \ Ratio = \frac{Market \ Value \ per \ Share}{Earnings \ per \ Share}$$
Ready, Set, Quiz! 📚
Prepare for an IPO (Investment Prodigy Outpour) with this stellar array of quizzes:
