This is a reprint from a post on SI by Surething, I don't agree 100% with it, but its not bad:
To this day the origins of the word Jitney are unknown. In the early days of public transportation, private cars would cruise by street car stops and pick up passengers for a nickel. The term Jitney was applied to these unlicenced operators. After much outcry by licenced taxi companies, street car operators, not to mention scores of injuries and fatalities, civic leaders throughout North America banned this type of private transportation service.
How Jitney made the jump from this to its present day form one can only speculate. Maybe in the early days of Broker Dealers, licensed brokers would execute trades through an unlicenced "Broker Dealer" to hide the origin of the transaction. As Broker Dealers were phased out throughout Canada by the various regulatory authorities, this informal arrangement between brokerages remained in place. Now desk traders merely phone one of their contacts in another firm and ask them to execute a Jitney on say 10,000 shares of XYZ. The extra cost involved is little. I personally know of a couple of traders who make a good living mainly by executing Jitney trades all day. Added cost to client is about $25 on a $5000 trade.
Basically, if you wanted hide which brokerage company you were buying or selling stock, you'ld execute what is called a jitney trade. If you called a broker at Haywood, and wanted to sell 10,000 shares of XYZ without people knowing you were selling out of Haywood, you would ask your broker to jitney it through another house, such as Yorkton. The trade would show that 10,000 shares were sold from Yorkton. |
