Distinguish Between Jobber and Broker | 12th HSC Secretarial Practice (S.P.) Chapter 12
The distinction between a Jobber and a Broker is the single most important question from Maharashtra State Board (MSBSHSE) 12th Standard HSC Secretarial Practice (S.P.) Chapter 12: Stock Exchange. Since it is the only primary textbook exercise distinction in Chapter 12, it is a 5-star board exam favourite and is frequently asked in Question 4 (Distinguish Between) carrying 4 Marks. Below is the complete, textbook-accurate tabular solution strictly aligned with the latest Balbharati Textbook and official board marking scheme.
Board Exam Marking Scheme Tip: Each Distinguish Between question in Q.4 carries 4 Marks (1 mark per valid point). Always present your answer in a neat 3-column table including the Basis of Distinction. Write at least 5 to 6 clear points (starting with Meaning, Nature of Trading, Restriction on Dealing, and Form of Consideration) to guarantee a full 4 out of 4 score!
Distinguish Between: Jobber and Broker
| Sr. No. | Basis of Distinction | Jobber | Broker |
|---|---|---|---|
| 1. | Meaning | A Jobber is a professional independent dealer in securities who buys and sells securities on the stock exchange in his own name. | A Broker is a member of the stock exchange who acts as an agent (intermediary) between the jobber and the general investors for buying and selling securities. |
| 2. | Nature of Trading | A jobber carries out trading activities only with the Broker on his own behalf for earning profit. | A broker carries out trading activities with the Jobber on behalf of his clients (general investors). |
| 3. | Restriction on Dealing | A jobber is strictly prohibited from directly buying or selling securities with the general investors (public). | A broker deals directly with the general investors as well as with the jobber, acting as a link between the two. |
| 4. | Status (Agent / Principal) | A jobber acts as a Principal (Mercantile Trader) who trades on his own account and bears the risk of price fluctuations. | A broker is merely a Mercantile Agent who executes orders on behalf of his clients (investors) without taking ownership risk. |
| 5. | Form of Consideration (Remuneration) | A jobber gets his reward in the form of Profit (called "Jobber's Turn"), which is the difference between his buying price and selling price. | A broker gets his reward in the form of Commission or Brokerage from the investors for executing their buy and sell orders. |
| 6. | Specialisation | A jobber is a specialist who usually deals in only a selected group of securities. | A broker is a generalist who deals in all types of listed securities according to the orders of his clients. |
| 7. | Capital Requirement | Since a jobber buys and holds securities in his own name, he requires a large amount of capital. | Since a broker only buys and sells on behalf of clients, he requires a comparatively small amount of capital. |
Quick Memory Trick to Remember All Points in the Exam
Memory Shortcut (Mnemonic — "MN-RS-FS"):
Remember these 6 easiest points from the Balbharati textbook to write in under 4 minutes:
1. Meaning (Deals in Securities in His Own Name vs. Deals on Behalf of Investors)
2. Nature of Trading (Trades Only with the Broker vs. Trades with Jobber on Behalf of Investors)
3. Restriction on Dealing (Cannot Deal Directly with Investors vs. Deals Directly with Investors)
4. Status (Acts as a Principal / Independent Dealer vs. Acts as an Agent / Intermediary)
5. Form of Consideration (Earns Profit / Jobber's Turn vs. Earns Commission / Brokerage)
6. Specialisation (Deals in Selected Securities vs. Deals in All Types of Securities)
Key Concept Summary for Objective Questions (Q.1)
- Four Types of Speculators on Stock Exchange:
- Bull (Tejiwala): A speculator who expects the prices of shares to rise in the future and buys shares now to sell them later at a higher price.
- Bear (Mandiwala): A speculator who expects the prices of shares to fall in the future and sells shares now to buy them back later at a lower price.
- Stag (Premium Hunter): A cautious speculator who applies for new shares in the Primary Market (IPO) expecting to sell them at a premium as soon as they are listed on the Stock Exchange.
- Lame Duck: A Bear speculator whose expectations go wrong and who struggles to meet his commitments because share prices rise instead of falling.
- Oldest Stock Exchange in Asia: Bombay Stock Exchange (BSE), established in 1875 (as The Native Share and Stock Brokers' Association), is the oldest stock exchange in India and Asia.
- National Stock Exchange (NSE): Established in 1992 by leading financial institutions, its flagship index is called NIFTY (whereas BSE's index is called SENSEX).