We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.


Bucket Shop

You could just watch Leo's Wolf of Wall Street.

"Bucket shop" is a pejorative term for a brokerage firm that employs questionable or unethical tactics.

Lloyd always wanted to work for a prestigious Wall Street firm like Morgan Stanley or Credit Suisse. Unfortunately, he didn’t get into a good school, his grades were poor, and he didn’t have any connections in the Capital Markets industry.

As a result, the best job he could find was with Silverman Suchs, a tiny bucket shop operating out of Islip, Long Island...a far cry from the trading floors of Lower Manhattan.

Related or Semi-related Video

Finance: What is a Bucket Shop?15 Views

00:00

Finance, a la shmoop. What is a bucket shop? Anyone see wolf of Wallstreet?

00:08

Remember Leo's firm yeah that was a bucket shop, it was set up to fraud, [Bucket shop stamp]

00:13

deceive, steal, and basically take advantage of trusting naive rubes

00:18

who gave Leo and his partners their money and well they basically did vile [Toilets]

00:22

things with it. Bucket shop is a derogatory term coined [Leo holding money toilet paper]

00:26

by the Supreme Court actually in a 1905 ruling, in practice bucket shops were

00:31

often unregistered financial pool halls where quote investors unquote would bet [Pool tables]

00:38

on short term stock moves and well never actually take delivery of a

00:42

security. They would just like make the bed and then whatever happened they'd [Men in suits]

00:45

settle in cash outside of the security system, think of the bucket shop as a

00:49

first derivative of a real brokerage, such that cash comes in and goes out

00:54

without a whole lot of logic behind it, it's like betting on what tickers gonna [Stock tickers]

00:59

come up next on CNBC at the bottom of the screen you know that thing. Yeah so [Stock ticker appears under the CNBC logo]

01:03

that's what that weird logic is or lack of it other than as a reflection of

01:07

whether or not Ford ticker F went up a dime or not that day, like that's what [Ford stock price chart]

01:11

bucket shops do you're just making bets on random things and yeah Ford the wolf [Chips being placed on a roulette table]

01:16

of Wall Street's second favorite F word, fine film though should see it... [The wolf of wall street being played in a theatre]

Find other enlightening terms in Shmoop Finance Genius Bar(f)