Legal Definitions - stockjobbing

Stockjobbing refers to the business activity of buying and selling stocks, shares, or bonds, primarily with the aim of making a profit. It particularly emphasizes situations where individuals or firms trade these financial securities using their own capital and for their own benefit, rather than simply executing orders on behalf of clients.

Here are some examples to illustrate stockjobbing:

• Example 1: A private investor, Ms. Rodriguez, dedicates a portion of her personal savings to actively trade shares of various companies throughout the trading day. She frequently buys and sells these stocks within short periods, sometimes even within hours, aiming to profit from small price fluctuations. She makes these decisions and executes trades using her own money, without acting as a broker or advisor for anyone else.

  Explanation: Ms. Rodriguez is engaging in stockjobbing because she is actively dealing in stocks (buying and selling shares) using her own capital ("on her own account") with the primary goal of generating profit from market movements.

• Example 2: "Apex Securities," a specialized trading firm, maintains a substantial inventory of corporate bonds. They are consistently prepared to buy or sell these bonds to other financial institutions, using their own firm's capital to facilitate these transactions. Apex Securities profits from the difference between the price at which they acquire a bond and the price at which they sell it, effectively acting as a principal in these trades to provide market liquidity.

  Explanation: Apex Securities is involved in stockjobbing because it is actively dealing in securities (corporate bonds) and operating entirely on its own account, using its capital to create a market and profit from the bid-ask spread, rather than merely processing client orders.