i’ve come across the term “jobber” quite a few time in trading articles/blogs/forums but have no idea as to what it means. and from what i discovered,these jobbers work closely with brokers maybe for increased leverage, reduced brokerage etc
my idea of the concept of jobbing is: arbitraging(finding out pricing discrepancies: between nse,bse,mcx-sx; spot and futures differences etc etc). it can also involve no arbitraging at all i.e. the security is bought and sold in rapid succession for few paise profit/loss(a kind of very aggressive scalping)
also let me know what the cons of trying to trade this way are. does it always lead to guaranteed profits?
Jobbing is placing orders for few paise difference with compulsory stop loss. Like buying a stock at 42.25 and selling at 42.35 with stop loss at 42.20. If the next price movement is upwards, 42.30 and 42.35, the orders executes in profits and if the next price moves down to 42.15 stop loss executes.
This way they keep their volumes high and get small profits. Like this will be done from 500 to 1000 times a day by a single person, say. The number of times the target hits should be greater than number of times the stop loss hits.
Hope you get the idea!
There are firms in Mumbai who employ people just for this jobbing activity, I think.
thnks karthik…but jobbers also have to pay the spread, right?
also can u give a simple hypothetical example of how a jobber might lose money
the thing is, one friend of mine is getting into this jobbing activity and he claims that by the end of the day, he’ll be in profits 95-99% of the time. how so?
(he hasnt started doing it yet but was xplaining the concept to me wid excitement)