General Questions Answered in the Options Market




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We do not guarantee or promise success in every instance. We present such facts before our readers from week to week as may come into our possession, and give them our best judgment as to the probable course of the market for the ensuing thirty days, and we say to them, if you choose to risk $106.25, you may realize a considerable profit.

We have daily inquiries from correspondents at a distance, saying that living so far from the city, and not knowing the best stock to select, or the most favorable time to close their contracts, that if we would attend to not only securing the privilege, but the selection of the stock, and closing the same, using our best judgment, they would be willing to forward their money to us for investment. We reply, that when requested, we will not only secure the privilege, but make the selection of stock and the kind of contract best to be taken, and also attend to the closing of same, exercising our best judgment. We are enabled to do this without prejudice to our customers, as our business is done strictly on commission, and we are entirely disinterested when we give our views of the market, which we never do until after studying the movements of the different cliques, and watching the outside influences that may be brought to tear on the market. It is to our interest as well as our customers', to select such stocks as are most likely to pay the best profits, for as we make money for them, we make it for ourselves, by increasing our business; and all who trust us with their business may rest assured that we will attend promptly and faithfully to their interest.

We do not guarantee or promise success in every instance. We present such facts before our readers from week to week as may come into our possession, and give them our best judgment as to the probable course of the market for the ensuing thirty days, and we say to them, if you choose to risk $106.25, you may realize a considerable profit. The stock broker who buys and sells for his customers can do no more than this. If he is consulted and is candid, he will tell his client what he thinks as to the prospects of a stock, desiring him at the same time to exercise his own judgment. He does not guarantee profits or promise success by any means. Those of our patrons who have followed the course of our suggestions, will agree with us when we state that our prognostications have generally proved correct, and when they have taken our advice, success has resulted in nine cases out of ten.

We have no intention of urging people to speculate against their wishes, and we desire to be understood as saying, that any person who has money which cannot be spared, had better not risk it either in speculations on margins or with privileges. If any one feels that he would be distressed by the loss of the funds which he proposes to use in speculation, let him give Wall Street a wide berth. On the other hand, a judicious investment of a few hundred dollars in stock privileges, may be the stepping stone to fortune, and it must be remembered that one profitable venture will repay the losses on a great number of unprofitable ones. So the ball of speculation once in motion is easily kept rolling, and gains at every turn.

All orders by mail or telegraph will receive our prompt attention, and should be addressed,

TUMBRIDGE & CO.,
BANKERS AND BROKERS, 2 "Wall St., N.Y.

option trading strategies

option trading strategies

option trading strategies

Suggestions.

  • Ff you are undecided which way a stock is going, always take a " Spread;" it costs $212.50, and pays a profit if the stock goes up or down.

  • To take an interest in several different stocks will generally be successful; in the numerous fluctuations, which occur everyday, you are certain to make a handsome profit on some of them.

  • Where a stock has once been in price, you may look for it to sell there again at some time.

  • Short Of Stocks. —To be "Short (f Stocks," or a "Bear," means that you have sold for a decline, stocks, which you have not in your possession, but your Broker borrows for delivery.

  • Long Of Stocks. —The expression being " Long of Stocks," or a "Bull," means that you have bought for a rise, and that the shares are in possession of your broker.

  • Our long experience in stock operations gives us many advantages, and coming in contact with the great stock manipulators, we are often able to judge of the future market and give our customers very valuable information and advice, enabling them to act upon it.

  • We are always careful to make contracts on parties of undoubted responsibility, and our customers can always obtain the name of the party from whom we have bought or sold contracts or stocks for their account.

  • The best stocks to secure contracts on are those in which the greatest activity is anticipated. When requested, we will make the investment in such stocks as, in our judgment, will give the largest returns, and will act for parties in securing the profits.

  • Contracts Left "With Us we will operate against either by buying or selling, in order to secure the various fluctuations of the day. Our customers are entitled to our services in the selection of the style of investment most likely to prove profitable for their account without extra commission charges.

  • If you think stocks are going down secure a Put; or you can obtain a Call and sell the stocks short against it.

  • If you think stocks are going up, secure a Call, or you can obtain a Put, and buy the stock against it.

  • When a telegraphic order is received by us and we have no funds to the credit oi the person sending such order, a check on New York, payable to our order, must be received by us by first mail.

  • We can always make returns the same day a contract is closed.

  • Extensions or renewals must be secured before the expiration of the original contract.

  • No Liability.—There is no liability, or risk, beyond the amount paid for a privilege.

  • Register all mone letters, send large amounts by express or draft on New York, and address all communications

TUMBRIDGE & CO.,
BANKERS AND BROKERS, 2 "Wall St., N. Y.

How $ 2,181.25 Was Made From A Call Costing $106.25

TUMBRIDGE & CO., BANKERS AND BROKERS, 2 "Wall St., N. Y.
demand the stock. If on the other hand the stock should decline, and not advance above the price named in the Call, the only loss that can possibly occur is the amount that may have been paid for the contract.

An actual transaction illustrated will assist the reader. By referring to our books we find that in March, when Union Pacific was selling at 41, we secured calls on this stock at 43 for 30 days, the cost of which was $106.25. The following is a copy of the contract secured :

option trading strategies

Every one per cent. Union Pacific advances above the price named, viz.: 43 is equal to $100 on each hundred shares, so an advance of five per cent., the contract would be worth Five Hundred Dollars, an advance of ten per cent, would be a thousand dollars, and so on. This is always the case. One per cent, on a stock that is worth in the market only 15, amounts to just as much as on a stock that is worth 110, because it is always the par value of a stock that is referred to, and not the selling value.

Before the above Call expired, Union Pacific had advanced to 66, at which price we closed the contract by receiving the stock from the maker of the contract at 43, giving our check for $4,300 and selling the stock in the market for 66, the holder of the contract receiving the difference. A statement would be as follows :

March 29th, 100 "0. P. sold C6, less 1/8 Commissions $6,587.50
March 29th, 100 U. P., called at 43 4,300 00
$2,287 50
Deduct cash paid for Call at 43 and Commissions 106. .25
Profit on the transaction $2.181.25

The Put That Paid A Profit Of $781.75, On Investment Of $106.25

Tumbridge & co., Bankers and Brokers, 2 "Wall st., N. Y.

The Use of Put Contract


A put contact is the very reverse of a Call—the holder having the right to deliver stock to the signer of the contract at a fixed price before its expiration. The maker of the contract is the only party bound, so that when advantage is taken of the contract and a delivery of stock made, it is always profitable for the holder of the contract. Consequently the market or actual selling price of the stock when Put will be less than the Put price. If you hold " a Put," viz, the right to deliver Jones 100 shares of stock for which he agrees to pay you $4,500 and you can buy that stock in the market for $2,500, it is very clear you make the difference between $2,500 and $4,500. Therefore, when Puts are bought, a decline in the market is expected, and the profits are made from the decline. The details of a transaction of this kind, such as furnishing the money to buy the stock, and making the delivery to the signer of the contract, is always carried out by your broker. The last few years puts have resulted very profitably. Every time the market has advanced it has been follow d by a greater decline.

Lake Shore on May 8th, 1875. was selling at 72. We find by referring to our books that one of our customers bought-a Put on 100 shares of this stock at 70, for thirty days, for which he paid $106.25.

The following is a copy of the Contract:

option trading strategies

The stock declined during May, to 57f but the contract was not closed until the day of its expiration, when the stock was selling for 61, at which price we bought 100 shares and delivered

option trading strategies

option trading strategies

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