New-York tribune., 1873-01-03
POOR MANS STOCK-GAMBLING.

PUTS CALLS, AND DOUBLE PRIVILEGES EX-
planned.
Many readers of THE TRIBUNE doubtless have
been frequently puzzled by the terms "puts," "calls
and "doube privileges" Dealings In these articles were,
some years SINCE regarded by the better class of brokers
as species OF gambling which they declined to tolerate,
and which the Stock Exchange prohibited its floor by
heavy penalties OF late years, however the dsfavor
with which such transactions regarded has mod
Grated with the times and although the Exchange still
prohibits such dealings its floor, members and spec
ulators now find ample opportunities for these
transactions on the street and in the offices
Of "put and call brokers'" who are not members
of the Exchange but who make speciality OF this bus-
ness. Indeed large has the business become that
those who follow it receive lucrative return without
the expenditure Of other capital than their own time and
intelligence One Of the dealers engaged in the business
issues the following explanation OF "pus" and calls"
and double privileges" Tor the benefit Of those who
are ignorant of the significance of the terms:
put" is contract enabling the holder to deliver TO
the person signing the specified number Of shares
of specified stock specified price, the number of
DAYS months agreed upon between the purchaser and
sgner Of the contract. A put" reads thus:
received the bearer deliver shares Of the
date The uudersgDe entitled all dividends dividends
"caii' is contract enabling the holder to demand OF
person signing the specified number Of shares Of
between the signel and purchaser, within given
time. A call" reads thus ,,
For received bearer call for shares Of the
stock Of company n to H Gsss ,1y eI sTs dividend. %
Double privileges" are contracts allowing the pur-
chaser holder to tbem either way that is, the
privilege of delivering to the sgner specified number
of shares of stock calling the signer for specified
number OF shares of stock. at specified price, within
the time named in the contract
According to the dealers who has been quoted above
the advantages of "put" are these:
II you propose TO purchase stock. J. e., ego long,"
you are much safer in pocket and in mind you
purchase put for this reason II you mace an error
IN Judgment which the shrewdes stock operators are
likely to do and the market goes down. the privilege
which you hold OF delivering the stock at price say
TO II per cent below that at which you have bought
makes you feel perfectly secure and you ignore all
pancs. When you want broker oDuy stocks for you,
poSt oS 10 per cent margin but You have an No
put" any broker Will buy Iaganst II as margin Or,
stand it for decline, then, in this position you are
equivalent 10 being short OF the market On
YOU wish TO sell what you have not got e., sell short
for the cost you can buy call" giving you the
during the specified period named and, against this.
you sell 100 shares short, as ia the event OF
teoed by the "call which gives you the control over
the stock, without actually Owning It, Orf you do not
for advance then IN this position you equivalent
TO being long OF the market at the price named IN the
Say for 100 shares ut 10 days s5 for days s
days $780, and one brokerage OF l6 The very best form
of privilege" lis the "dOuble privilege" when the
bearer can cs on or deliver gner OF the
the specified number OF shares OF stock at the market
puts" aud "cas" aud the time 10 TO co days. ana the
price from $50 to $3.50 For outsiders" who not IA
decidedly contracts purchase, ali the holder
has to do Is 10 remain quiet until the market has de.
the putt II the stock has declined, selling against
the "cal" If the stock has advanced.
The special advantages, II they can be termed,
the facilities for gambling which are thus given u
poor men who could not deal otherwise the margin
required by regular brokers would be beyond their
means.