Jobber is a slang term used to call market makers who help maintain the liquidity, buying and selling the stocks consistently their names.
However, their numbers are decreasing in the market compared to 10 to 15 years ago.
In this article, you will learn about the roles and responsibilities of a jobber. Do they work under a broker?
By the end of this article, you will learn about the basic differences between the Jobber and broker. Also, how to become a jobber?
But, before jumping deeper into it, let’s understand what Jobber is in the stock market?
Jobber In Stock Market
A jobber in stock market is an individual who keeps his eyes on the movement of specific stock’s price to buy or sell the bulk stocks in an intraday for the investors. Jobbers are often called stockjobbers or market makers and regarded as professional speculators.
Jobber key Responsibilities
Following are the duties or key responsibilities of a market maker/jobber
- The jobbers directly purchase the stocks from the stock exchange companies and sell either to the other jobbers or stock agents. They are not authorized to sell their stocks to the clients directly.
- They stand on behalf of stockbrokers and perform similar buying and selling operations.
- Jobbers helps in maintaining the cash flow by frequently buying and selling the shares.
- For buying or selling the stocks, they use different sign and symbols, which needs to be understood by the other parties who are buying from or selling to jobbers. If misunderstood, it may cause loss.
Example:
Suppose a jobber has 20 shares of 20 rupees shares value each, wants to sell his shares in 21 rupees per stock. He sent the signal to the buyer that he was selling it for 21 rupees per share. But, he misunderstood it as 20.50 rupees. In this scenario, the seller will lose 50paise per share.
Jobber Vs Broker
The five points signify the major differences between jobbers and brokers.
- A broker is firmly called an agent, a middle person who usually sell or buys stocks on behalf of their clients. On the other hand, Jobbers buy or sell stocks in their name.
- Since the Jobbers purchase and sell stocks on their names, they earn profit margins. On the other hand, the brokers earn brokerage as their profit.
- The Jobbers have no authority to sell or buy securities in the NSE or BSE. Also, they are not authorized to deal with the investors directly. In contrast, the brokers are the middleman between investors and the Jobbers. They sell or buy stocks on behalf of investors.
- The brokers are general mercantile persons. However, the Jobbers are special mercantile agents.
- The Jobbers are authorized to do business only with the brokers or other Jobbers, while the brokers are also authorized to carry out their trading business with investors.
- The jobbers are prominently active in the secondary market. On the other hand, the brokers deals in the primary market.
- While differentiating their nature of work, the brokers are known to deal in retails, whereas the jobbers are the wholesalers.
How To Become Jobber?
There is no need for any special degree or course to become a jobber. A 12th pass person with good sense and speculating skills can become a good jobber.
But, unfortunately, there are no scopes for jobbers nowadays. The digital fintech companies take over the job’s responsibility of jobbers.
Does The Jobber Work Under A Broker?
The jobbers work with the brokers who are closely associated with the investors. Since the jobbers are not allowed by the SEBI to directly deal with the investors, they always need brokers or other jobbers to make their profit.
Are Jobbers Still In Stock Market?
Since it is the digital era, jobbers are now replaced with digital companies. Therefore, They are almost negligible in the industry.
To Sum Up
Both brokers and jobbers play a significant role in stock purchases and sales, but they are involved in various stages of the process. Brokers carry out stocks transactions for their investors.
However, jobbers ensure that when brokers require selling or buying shares for a client, they have someone to buy from or sell to.
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