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TeachMeFinance.com - explain pool pool -- a large group of mortgages that back a mortgage security. historic definition... Pool -- This term applies when interests join together for mutual advantage. The anthracite cpal pool, as it formerly existed, was an agreement whereby each company belonging to the pool was to mine a certain percentage of the total production. The production for each month was determined in the preceding month. The purpose of the pool was regulation of both output and prices. By restricting the output to the consumptive demand control of prices was accomplished. A schedule of prices was prepared for each month and all the companies made sales of coal in accordance with it. The anthracite coal pool was declared illegal by the courts on the ground that it was in restraint of trade. In manufacturing pools are often formed. Formerly the manufacturers of steel rails joined in a pool. The pool fixed prices and each concern was allowed to make and sell a certain percentage of the total output of rails. Pools, for the most part, have been terminated by the Interstate commerce law and by the national anti-trust law and the anti-trust laws of the various states. Also, the term pool is applied to a fund contributed by several persons for the purpose of undertaking a speculation. When a pool is formed in a stock in order to manipulate the stock the contributors to the pool (mutual fund) appoint a manager of it who conducts the operations in the stock. If it is a bull pool the first step is to buy as much stock as is desired at as low prices as possible and then by means of wash transactions (see Washing) in the stock advance the price to a point where the stock actually held can be sold at a satisfactory profit. If it is a bear pool the first step is to sell short (sell stock not owned) to the extent desired at as high prices as possible and then by means of wash transactions in the stock depress the price to a point where the stock actually sold short can be bought back at a satisfactory profit. Stock holdings are sometimes pooled (or put in a pool) to obtain control or tie up control of a company. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.