Bucket Shop (stock Market)
As defined by the U.S. Supreme Court a bucket shop is "n establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in." People often mistakenly interchange the words bucket shop and boiler room, but there is actually a significant difference. A boiler room has been defined as a place where high-pressure salespeople use banks of telephones to call lists of potential investors (known as "sucker lists") in order to peddle speculative, even fraudulent, securities. However, with a bucket shop, it could be better thought of as a place where people go to make “side bets” – similar to a bookie.
The term Bucket Shop is a defined term under the criminal law of many states in the United States which make it a crime to operate a bucket shop. Typically the criminal law definition refers to an operation in which the customer is sold what is supposed to be a derivative interest in a security or commodity future, but there is no transaction made on any exchange. The transaction goes 'in the bucket' and is never executed. Without an actual underlying transaction, the customer is betting against the bucket shop operator, not participating in the market. Alternatively, the bucket shop operator "literally 'plays the bank,' as in a gambling house, against the customer." Operating a bucket shop in the United States would also likely involve violations of several provisions of federal securities or commodity futures laws.
A person who engages in the practice is referred to as a bucketeer and the practice is sometimes referred to as bucketeering.
Read more about Bucket Shop (stock Market): History in The United States, Origin of The Term, House Stock Scam
Famous quotes containing the words bucket and/or shop:
“She was a charming middle-aged lady with a face like a bucket of mud. I gave her a drink. She was a gal who’d take a drink if she had to knock me down to get the bottle.”
—John Paxton (1911–1985)
“A mound of refuse or the sweepings of a street,
Old kettles, old bottles, and a broken can,
Old iron, old bones, old rags, that raving slut
Who keeps the till. Now that my ladder’s gone,
I must lie down where all the ladders start,
In the foul rag-and-bone shop of the heart.”
—William Butler Yeats (1865–1939)