What Are Jobbers? Unlocking the Secrets of Past Market Makers
“Jobber” is a historical term that referred to a market maker on the London Stock Exchange before the mid-1980s. Jobbers, often called “stockjobbers,” were essential in maintaining market liquidity. They held shares in their own accounts, enabling the smooth transaction of buying and selling securities. By matching buy and sell orders through brokers, who by regulation, couldn’t create markets themselves, jobbers played a vital role.
Interestingly enough, the term “jobber” also applied to small-scale wholesalers or intermediaries in the retail goods trade sector.
Key Highlights
- A jobber, synonymous with a stockjobber, previously functioned as a market maker on the London Stock Exchange.
- They held shares in their accounts and ensured market liquidity by matching buyers’ and sellers’ orders via brokers.
- The evolution of the jobber system took noticeable strides in the 19th century as securities types diversified.
- Record-keeping was minimal for jobbers, and detailed accounts of their activities are sparse.
- The term
Related Terms: market maker, stockbroker, bid-ask spread, financial revolution, electronic trading.
References
- The Independent. “The day Big Bang blasted the old boys into oblivion”.
- Institute for Historical Research. “The jobbing system of the London Stock Exchange: an oral history”.
- Attard, Bernard. Making a market. The jobbers of the London Stock Exchange, 1800–1986. *Financial History Review,*Vol. 7, No. 1, 2000, Pp. 5-24.
- Philip Auger. The Death of Gentlemanly Capitalism. Penguin Books, 2000.
Get ready to put your knowledge to the test with this intriguing quiz!
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## What is a "jobber" in the context of financial markets?
- [ ] A type of long-term investor
- [x] A market maker trading on their own account
- [ ] An auditing firm
- [ ] A regulatory body
## In which historical context is the term "jobber" most commonly found?
- [ ] The modern New York Stock Exchange
- [ ] Contemporary digital trading platforms
- [ ] Modern corporate finance departments
- [x] The old London Stock Exchange
## What characteristic distinguished a jobber on the trading floor?
- [x] They didn’t deal directly with the public
- [ ] They were responsible for long-term investment strategies
- [ ] They primarily focused on commodities trading
- [ ] They enforced regulatory compliance
## What was one of the main roles of jobbers within the stock market?
- [ ] Performing financial audits
- [x] Providing liquidity by quoting bid and offer prices
- [ ] Managing client portfolios
- [ ] Conducting market research analyses
## Which event marked the decline of the practice of jobbing?
- [ ] The establishment of the SEC
- [x] The Big Bang deregulation of 1986
- [ ] The introduction of electronic trading
- [ ] The financial crisis of 2008
## How did jobbers earn profit?
- [ ] By charging consultation fees to clients
- [ ] By trading on foreign exchanges
- [x] By profiting from the spread between bid and offer prices
- [ ] By managing large pension funds
## What was a key limitation in the jobber’s operations?
- [ ] Lack of access to international markets
- [x] They could not deal directly with the public
- [ ] Inability to trade stocks
- [ ] Restricted to offering only equity securities
## Jobbers primarily operated under which trading paradigm?
- [x] Open outcry system
- [ ] Fully automated electronic systems
- [ ] High-Frequency Trading (HFT)
- [ ] Blockchain Ledger Systems
## What was the relationship between jobbers and brokers?
- [ ] Jobbers directly competed with brokers for clients
- [x] Jobbers acted as intermediaries between brokers
- [ ] Jobbers provided analytical reports to brokers
- [ ] Brokers specialized in government bond trading only
## After the decline of jobbing, who took over their role?
- [ ] Mutual fund managers
- [ ] Financial regulators
- [ ] Stock market auditors
- [x] Modern market makers and electronic trading platforms
