Phillipsburg herald. [volume] (Phillipsburg, Kan.) 1882-1905, 1884-05-22
The Science Of'Privleges,'' Which UnhOrs-
ed Jim Keene.

AS a majority of people do not know
what sort of things stock privileges are,
it may not be out of place, the New York
Sun thinks, to say a few words on this
subject. A stock privilege is a paper sign
ed by some Well-knOwn person, and en-
titling the bearer to put out, or call from,
that person given amount Of given
stock at a given price Withina given time.
These privileges are paid for according to
their speculative value, their duration
and the amount of stock they are issued
for. They are practically insurance tick
cts against losses in stock gambling. "a
man who buys a privilege can not lose
more than the amount he pays for it. If
he buys a stock and it goes down, he can
put it to the signer of the privilege. If
he sells it short and it goes up, he can
call it and cover his contract. The social
ed puts and calls go only one way, and
the bearer can only either put to or call
from the signer the stock concerned.
The spreads and straddles work both
ways; the holder can either put in or call
from, the signer the stock concerned.
The sellers of privileges work upon the
same plan as bOokmakers do at the races.
They sell stocks short against their puts
and buy them against their calls. AS a
rule they make great deal Of money, for
|
far away from the market, and the pre-
MUM paid for the privilege forms in
most cases a clear profit. The largest
dealers in privileges are Messrs. Russell
J. R. Keene, NJ. 0. Bogart and S. Y. White.
! Old Sage has made million or two by
selling privileges. Being a Director in
many corporations, he always knows
which way given stock is likely to go,
and sells his puts and calls accordingly.
Besides, he has large following and can
always make rich people buy or sell a
certain stock, and thus protect his paper.
Mr.. Keene had the disadvantage OF
not being connected with any large cor
poration, and of having no following to
speak Of But he had perfect passion
for selling privileges. A crisp ST. 900 bill
exhibited by curbstone privilege brok-
er was to him like piece of red cloth to
a bull. He could not resist the tempta-
ton to go for it. If he had confined him
self to the dealing in privileges he would
probably have come out ahead. But, be.
ing a large speculator besides, he was al
the time crippled in his movement by
the puts and calls he had out. He was
probably the most consistent and intelli
gent bear for the last two or three years
yet he did not dare to allow the marke
to go down too far out of fear that anava
IancnG OF SCOcK would come down upOI
him. The consequence was that he haC
to sustain the market by buying stocks
and, as prices went down, notWithstand
ing his efforts, he had mass of stock
put to him besides. That game was go
ing on for very long time, and he wa
| a big loser at it all the while. His hes
friends implored him long ago to give u
the privilege business, and he has re
peatedly promised them to do so, put tn
fatal passion was there and he could no
get rid of it. The collapse had to come
and it came. There can be no doubt tina
! he willmake all his outstanding contract
: good, though it will probably take hin
] some time to do so, but the nervous ten
f sion to which he must be subjected a
the present moment must be terrible, an
: there is not man in Wall street VIII
: knows him well who does not deepl
a sympathize with him. He was Away
f the most open-hearted and the leas
: tricky of the great Wall street men. Be
| sides, he fought all his battles single
! handed, and some of them were might
4 big battles, too. His pluck and endul
: ance are subjects of admiration, even o
the part of his enemies.