Talk:Bucket shop

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[edit] 2 Definitions

OK guys. There are 2 definitions of bucket shop. Like many words or phrases, it can mean 2 different things. Please don't delete one definition, but keep both.

I've heard "bucket shop" used for a travel agency, without pejorative implication, in (I think) an episode of the English detective series Bulman. — I've never heard the armorials called "buckets" before; tell me more? —Tamfang 06:39, 16 February 2006 (UTC)

[edit] Article Structure

The structure of this article is sloppy. It needs to be reorganized, and perhaps edited a bit, but I'm not familiar with the content. 68.14.76.151 18:06, 23 April 2006 (UTC)

  • Woudln't it be easier to turn the Bucket shop page into a disambiguation page. From there, the different definitions can be given their own articles. I'd be willing to do the work if there's a consensus.--Eva db 14:06, 16 May 2006 (UTC)
    • I think the different definitions are too short to justify four articles. Also, having them all in one article makes it easier for readers to compare them and see the pattern. Only if one of the sections were to really grow in size should it be moved to its own article in my opinion. S Sepp 14:25, 16 May 2006 (UTC)
  • Fair enough. Does anyone have any other suggestions on how to make this article look nicer?--Eva db 11:14, 17 May 2006 (UTC)

Why are bucket shop and heraldic scam even in the same article? It seems to me that "heraldic scam" has very little to do with bucket shop, and should be moved to its own article.Plazak 23:23, 4 March 2007 (UTC)

If you ask just about anyone in the heraldic community what a bucket shop is, they will give you a response similar to this article. For most heraldic enthusiasts, it is the bain of their existence.--Eva bd 14:04, 5 March 2007 (UTC)

[edit] "an heraldic" or "a heraldic"

I've seen heraldic preceded by both "a" and "an" in different places. Is there a Wikipedia policy on this issue? In this article, it has just been changed to "an," but I usually say "a" when I'm speaking. Is it a British/American usage thing?--dave-- 14:50, 15 November 2006 (UTC)

[edit] Sources Needed

I'm not sure that all the info here is true. The "brokerage scam" article doesn't make any sense.

[edit] Margin Call

Someone needs to explain this better in the article. Stock bucket shops were frauds for a few reasons:

1. No stock trading ever took place. All trading was between the bucket shop and its clients. 2. Bucket shops made clients trade at razor-thin margins (like 1%), and refused to accept margin calls. I will explain this point in greater detail because it is very important.

Imagine trading through a legitimate stock broker. You decide to buy IBM stock at a 1% margin. IBM stock is trading at $1. Because you have a 1% margin, you can control 100 shares of IBM (worth $100) with a $1 investment. You enter the trade at $1.00 If IBM stock rises to $1.01 (1% gain), you now control 100 IBM shares worth $101 which you could now sell for a gain of $1 (a 100% return on the original $1 investment). Thus a 1% gain in IBM stock means a 100% gain for you. Similarly, a 1% loss in IBM stock means a 100% loss for you. If IBM stock did fall by 1% (to $99), then your $1 margin investment would be completely wiped out. The broker would then make a margin call, asking you to fund your account with another $1. If you do not pay up the $1, then the broker will close your position and you would be forced to realize the loss of the entire $1 investment. The important thing is that you can keep funding your margin account with more money, if you really believe that the stock is going to eventually go up. A legitimate broker will only force you to realize a loss if you failed to fund your margin account. But at a bucket shop, you would not be allowed to fund your margin account. As soon as the stock fell 1%, the bucket shop would immediately force you to realize a 100% loss. This is how the bucket shops made money. As soon as your position moved 1% again you, they would take all your money. You had the chance to make huge gains, but chances were that your position would move 1% against you before you had the chance (or the discipline) to realize a capital gain. And as soon as the position moved 1% against you, you were forced to realize a 100% loss. In those days, stocks were far more volatile today, so it was easy for a stock to move 1% below your buying price before you had the chance to sell at a profit.

3. Stock manipulation. Combine the point #2 with stock manipulation, and you have an even bigger scam. Imagine that a bucket shop noticed that a huge portion of its clients and bought large amounts of IBM stock. The bucket shop had enough money to start selling the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down 1 or 2 percent. This small, temporary downard move in the price would cause all the bucket shop's clients to wipe out, and the bucket shop could take 100% of their investments.--74.98.253.150

Perhaps the "someone" that explains it better can be you. Please summarize this information in the article. Be bold. Also...don't forget to sign your posts.

[edit] Split Discussion

The two concepts of "bucket shop" are distinct and require their own articles. I am interested in improving Bucket shop (stock market). patsw (talk) 13:11, 26 March 2008 (UTC)

The split has been made. patsw (talk) 19:11, 30 March 2008 (UTC)