Option Trading Explained
Understanding the puts and calls of it all.
A PUT OPTION CONTRACTA Put option is a transferable-bearer contract paid for by the buyer upon delivery of the contract, giving him the right, at his option, to deliver to the maker or seller of the contract a certain number of shares of stock at a fixed price on or before a stipulated date. In the above contract the holder may deliver to the endorser of the contract 100 shares of XYZ common stock at 70 any time before the expiration date (August 20) at his option. The exercise of a contract is not automatic. The contract must be presented to the cashier of the endorsing firm before expiration. The above contract has been approved by the Put and Call Brokers and Dealers Association, Inc. and is used by members of that association.
This is the reverse side of a Put contract and will be signed by a member firm of the New York Stock Exchange, guaran­teeing to the holder of the Put contract that the stock will be accepted if the holder of the Put wishes to exercise his option.
CALL OPTION CONTRACT A Call option is a transferable bearer contract paid for by the buyer upon delivery of the contract, giving him the right, at his option, to buy or "Call" from the maker or seller of such
contract a certain number of shares of stock at a fixed price, on or before a stipulated date. In the above contract the holder may call for or buy from the endorser of the contract 100 shares of XYZ common stock at 70 any time before the expiration date (August 20) at his option.
This is the reverse side of a Call contract whereon is put the endorsement or guarantee of a stock-exchange house guarantee­ing to the holder of the Call that the stock specified in the con­tract will be delivered to him, at his option, upon presentation of the Call contract.
THIS IS A QUOTATION SHEET DATED MAY 25, 1959 This is what we call a nominal quotation sheet from May 25, 1959, which is sent along with explanatory literature to those who inquire about our business. It is merely an approximate price at which options are quoted on a representative list of stocks on which options are written. However, options are written on a much longer list of stocks than those indicated; in fact, options can be arranged on most common stocks listed on the New York Stock Exchange, some stocks listed on the American Stock Exchange, and at times on stocks traded in the over-the-counter market. Anyone interested in the buying or selling of an option can obtain quotations through his stock-exchange broker or directly from an option dealer. These quotes are nominal. Latest quotations should be obtained from your Stock Exchange broker, or directly from us. QUOTATIONS FURNISHED BT Filer, Schmidt & Co. ESTABLISHED 1919 Members Put & Call Brokers & Dealers Ass'n, Inc. |
