The Republican. [volume] (Oakland, Md.) 1877-current, 1883-03-24
"PutS and Calls. I"

puts dbo CtlAS9 bdlu U ICpOTbCE W
J. 3. Hobbs, President of the Chicago
Board of Trade, who proved to be very
we'll posted.
81 couldn't tell you" 1H
Can't you guessp" f--.
That would be the only way" ga.
Guess then"
"'Ican't."
Ills il. 200, 600 bushels day."
20, yes" '...
More than thats''
"A good deal"
'.Doublee"
''Yes-sometimes in Che millions"
t''Who are engaged in the business"
i"Pretty much everybody"
''Are your"
eyes. Customers want us to buy
and sell puts and calls. and we have to
do it, because that has grown up to be a
large part of the trading"
"Do all the commission houses take a
hande"
mot 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 he short, and if he sells, because he
would just as leave have q put as not.
Then others buy and sell and trade on
them. For instance, a man buys 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 tradingP"
Yes"
what explanation is given for its
violatione"
"None whatever"
d" Is 1t a dead letter."
- Yes. Ii is such common practice
that nobody pays any attention to the
law"
&" Hasn't the Board shut down on the
businessa"
No. 1t has been the practice for
twenty years"
When is the trading donep"
" After the two o'clock call"
g Has there been an increase since the
law was paSsed%'
% The business increases with the vol
une of trade"
" The law is of no use, thenp"
$ Trading in options is the custom all
over Che country. Ii 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 for2'
* 1 think for protection. When there
are violent fluctuations and man has an
amount of property put to him on de-
clining market he gets no compensation
for ii. That is to say, take 5000 bushels
of wheat. A man buys put for ten
dollars. 1t may decline ten cents bush
eel. The loss on that would be $500, and
he only receives as compensation ten dol
lars"
s. He doesn't buy the property"
- Yes. When they put it to him it be-
comes trade just the same as if it was
an act,fal sale; it becomes an actual
sale"
g Isn't it true that in the bulk of cases
no property passes" ..,
go no"
g Property actually passes?''
" II a man buys put and the market
declines so that he can put it, or if he
buys call so that he can call it. the put
and eau then becomes actual trades
Just as much of trade as if made in any
other way"
''The law doesn't apply TO such trad
ingP"
''The law applies to the trading. That
is, put is Illegal and if you put the
property you can't recover any damages
through the courts"
''Then il is question of honor"
THAT is ALL"
care the trades honoreda"
Eyes, as rule"
What proportion of the commission
men are engaged in this businessr'
Il don't know"
''Halfa"
II couldn't say"
"a good manye"
eyes. don't wish to name them;
but the business is SO common that it is
not discreditable at all. 1t may be in
violation Of the law, but they are not
doing any injustice. Puts and calls
might possibly do "a great deal of harm
to the parties who sell them. They can
never do any harm to the parties who
buy them. except to the extent of the
money paid, whicb is very small per,
centage."
why not TO those who buy themP''
Because the party who buys only
runs the risk of losing the amount he
pays for the privilege. For instance
The money paid on five thousand bushels
of wheat is ten dollars and on five thou
sand bushels of corn is five dollars. He
can lose only ten dollars on the wheat
and five dollars on the corn; but the
party who sold may have the property
put or called. and lays himself liable tt
lose very large amount
''Do you think it advisable for people
in the country to send money here to b,
invested in puts and callsP'
''No. sir" H.
Are not the firms square who adver
tise that they will make such invest
mentsP''
'Frhey may be square, but man il
the country who buys a put or cal
would stand no chance whatever O
making any money!" d .
because he don't know anything
about the trade"
"No. not that I don't want to sa,
that he would never make any money
but the chances are that he would not
EtWhv2n