The Colfax chronicle. [volume] (Colfax, Grant Parish, La.) 1877-1981, 1883-04-14
ssPuts and Calls.

e ~. hOUuSs AEcSlucut Vi the Onicd9O
Board OF Trade, who proved to be very
well posted.
IL couldn't tell you"
Cant you guess?"
THAT would be the only way"
"'Guess then"
~ can't"
as it 200, 900 bushels a day?'
20, yes.''
"More than thatr'
"A good deal"
"Doubler
"Yes-sometimes in the millions"
who are engaged in the business?"
pretty much everybody"
''Are youp''
Eyes. Customers want us to buy
and sell puts and calls. and we have to
do it, because that has grown up to be q
large part Of the trading"
''Do all the commission houses take .
hand?"
''Not all-only those who are engaged
In speculative trading. A great many
do it for protection. One may be long
and buys put so that if the market
goes down he is all right. Another
may be short, and il he sells, because he
would just as leave have put as not.
Then others buy and sell and trade on
them. For instance, . man buys o put
at a certain price under the market. If
the market declines to near that price he
will buy the property and take the
chances of an advance"
."You know of the law prohibiting
such tradingr'
Yes
"what explanation IS given for its
violation?"
"None whatever"
us it dead letter."
Yes. 1t is such common practice
that nobody pays any attention to the
law"
Hasn't the Board shut down on the
business?"
mo. 1t has been tina practice for
twenty years."
When is the trading done3"
After the two O'Clock call"
Has there been An increase since the
law was passed."
:" The business increases with the vol
ume OF trade"
''T The law is of no use, then?'
'' Trading in options is the custom all
over the country. It is the practice in
New York on the Stock Exchange and
on the Cotton Exchange. The most
prominent men are operators in puts
and calls"
.What was the law framed for?"
+" think for protection. When there
are violent fluctuations and man has an
amount of property put to him on q de-
clining market he gets no compensation
for it. That is to say. take 5000 bushels
of wheat. A man buys put for ten
dollars. 1t may decline ten cents BUSH
ell. The loss on that would be $500, and
he only receives As compensation ten dol
lars"
" He doesn't buy the propertyr'
Yes When they put 1t to him it be-
comes trade jus. the same as il it was
an actual sale; it becomes an actual
sale"
Isn't it true that in the bulk Of cases
no properly PEI pAs'esf"
Property actually passes?''
eff man buys put and the market
declines so that he can put it, or il he
BUYS a call 90 that he can call it. the put
and call then becomes actual trades
just as much of q trade as If made in any
other way"
1.-THE law doesn't apply 70 such trad
ing?"
SThe law applies to the trading. Thai
is, q put is illegal. and if you put thu
property you cant recover any damage:
through the courts"
"Then il is question of honor"
THAT is all"
s.Are the trades honoredg'
Eyes, IS rule"
s'What proportion of the commission
men are engaged in this businessp''
II don't know"
sHalfr'
IL couldn't say"
IA good manyP"
Eyes. don't wish to name them
but the business Is 90 common that it i
not discreditable at all. It may be il
violation OF the law, but they are no
doing any injustice. Puts and call
might possibly do q great deal Of harm
to the parties who sell them. They Cal
never do any harm to the parties VIII
buy them. except to the extent of tn
money paid. which is , very small per
\ centage."
"Why not to those who buy themP'
A because the party who buys onl
Il runs the risk Of losing the amount h
| pays for the privilege. For instance
4 The money paid on five thousand bushel
of wheat is ten dollars and on five thou
Il sand bushels of corn is five dollars. H
can lose only ten dollars on the whes
and five dollars on the corn; but tn
party who sold may have the propert
put or called, and lays himself liable
( lose . very large amount"
.'Do you think it advisable for peopl
in the country to send money here TO b
invested in puts and calls?"
mo, sir.
..Are not the firms square who advel
tise that they win make such inves