Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1888-12-20
SLANG or WALL STREET.
Gne Nernacular Of the Brokers Explained
by Young Napoleon of Finance.

did ! ever buy stocks on margin Pr
remarked a young Napoleon of finance
to a New York Mall a3ld Express re-
porter "Well, | should smile; but, to
use the language of the street, | have
sold out and quit No more margin
for me; no more stocks. | am dead
tired of being in the Wall street swim,
and am glad to be out of it, Oh, no,
don't mind telling you q little about
the slang. Let as take lending
money-making Cor money losing)
stock say, Union Pacific For in-
stance, you believe u. T. will advance,
and you call on your broker and buy u
hundred shares, expecting To sell them
when the price is a few points higher.
II the price is low it win cost YOU Just
$4,000 to buy the stock outright, and
there are but few fellows, unless their
papas are well fixed, that can do that,
of course, unless il is bought for iu-
vestment Your broker, howey Ct, only
asks you for deposit of 10 per cent.
of the amount, that is if you are new
hand; but when YOU are an 'old-timer'
you can have it done for great deal
less. Well, that's 5000, anyhow. This
deposit may be IN cash, but You will
arrange 20 put mp securities, railroad
or any other kind, the market value of
which is 5000 at least. As the broker
holds the stock purchased. his security
is sufficient. The STOCK is then said to
be 'margined' up Go $50. If the stock
advances, say to s.. you can sell out
and pocket 5000 in cash, less your
brokers' commission. In this opera
ton he is long of the market ard is
recognized az n 'bull' on stocks Ii,
ON the other hand, the stock fails TO
advance, the broker holds it until the
loss IN price is nearly equal TO tho
margin deposited, when you are noti-
fed to put up more margin. 4 Same
state of affairs is likely to occur if the
margin itself has shrunS in market
value If the brokers demands are
met the stock is held until the price
advances or until the margin is again
exhausted. If you fail TO come to time
and put UP more margin, tho broker
sells your stock at 90, and, of course,
pockets the margin, by which proce-
dure, IN the language of the street,
you are wiped out. just as long as
you keep the stocks good will your
broker carry the stock for you, but
no longer Selling stock short is
the reverse OF going long Say, for
instance, you believe certain stock is
going TO decline Ia price You sell 100
shares of Union Pacific at GO through
your broker If you sell your own
stock, which y0uhav bonghtat alowor
figure, you are ncrey realizing and
taking your proliis. But sales for the
short account DO not neecssitato the
actual possession of the stock. Tho
one hundred shares are borrowed on
the loan crowd at certain rate OF
interest. This borrowed stock is de-
liyercd to the broker who bought the
one hundred shares az 60. In this
case yon need only put up a margin
of about 10 per cent. OF something less.
If the price of Union Pacific declines
10 81 your broker has only to lay ono
hundred shares ia the market and re-
turn them 10 tho party from whom tho
stock was borrowed As tile borrowed
shares were sold for $4,000. and 81, 700
were paid for the purchase, his profits
are, of course, $500, less the natural
commissions and the interest ON tho
borrowed stock"