Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1886-11-02

w ALL STREET 1ERM5.-Mr. russell sage,
who invented puts" "calls, ;" spreads, 'and
''strnGdles," began dealing in them when be
first came to Wall street in 1861. The stock
markets Of the world have taken up his in
geni2us speculative device and stock priv-
legca a;c as we'll known on the continental
honrses 10 day aa1 in the London market
~ they are in This country.
\ privilege" Is contract by which the
n!ako. Of it, Russell Sage, for instance, en-
gages ia iucchase from the holder in tho
one case, Or 10 cell to the holder in the 9TH
er case, Il number or shares Of some specified
stock, at a certain price at any time with.
in a certain period at the option of the
holder
A"caIl'' ia privilege bought of the maker
al cectain price, ard the owner OF it is
privileged To cnll for certain amount of
stock at given price, within thirty, sixty
or ninety days, four or six months. If IA
Eaan holds q put" he has the right to de-
liver To lho maker Of the privilege y stock
at certain agreed on price within q certain
numacr Of days. Suppose Western Union
Is selling at %. 4 man wants n sixty day
Put or it ut &C. because lie believes tho
5to. k Is going down. He gives Mr.. Sage
pa! ccnt. u. the amount Of stock lie wants
| ;" Deal IN. \ hundred shares is usual, and
! per c,vt. Is 800. He receives in return u
slip ct paper signed ny Sage If Western
Union goes below 66 within sixty days. he
Eay buy il fer whatever il is selling for be.
low thai price, ard put it to the maker of
he privilege a; tn" price agreed on (66l and
receive a check for $4,000. The holder
MAKES tho difference If telegraph does not
go below 81 The holder is out his 800.
Ihc "call" BUSINESS operates exactly in
the opposite way. A man buys tho priv
i!eGe If calling Western Union NJ 15 when
i; j. selling At 20. If it sells above 70, you
can call on the maker Of the privilege foy
100 skates at -, and tho 100 shares are thus
bought hy the holder for 81 800, and he
;Grns arouud and sells it al so, if the stock
Is selling tnero, and pockets the difference.
y 'S;raadic" is y put and call combined
Tho holder OF one may put stock to the ma
kar OF the privilege or call for it. Straddles
come high, because there is money in them
whichever way the market may go. If the
market does not go at all, but stands
still, why, the maker is in the money he
has been paid for the privilege, usually
about per cent, or 5000
A "-prcaA' is also put and call combin-
made at The market. That is to say, the
moker Of The privilege takes the risk that
the stock ia question does not movo to any
extent from the price at which it is selling
when the privilege is sold. In spread the
maker has more leeway. IfWestern Union
i selling nj 20, TO 20 back to the old illus.
traiion. the maker Of the privilege sells a
| spread, say al IL and SD. II it goes below
| 81, III" holder eau put the stock and make
the difference, aud il it goes above so,
the holder can call it at that price
snd reap the profits. But SO long
As the price If the stock keeps
within those points the maker of the
privilege is sGl,. 70 put it in another way
the holder Of II atradd'e will make if the
market fer the stock he is dea'ing in moves
at ali. The holder Of a spread doesn't make
anything rntil tho market moves past GER
tain limits. The maker Of a privilege only
receives The money Cor which he sells the
privilege, while the holder may make thou
sends-or nothing.-N. \. Mail and En-
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