The term _bull_ is applied to those who are purchasers of stock for
long account, with the purpose of advancing prices, as the tendency of
a bull is to elevate everything within his reach. The term _bear_ is
applied to those who sell short stock, with the purpose of
depreciating values. The _bear_ operates for a decline in prices. The
broker's charge for his services is called a _commission_, which in
the New York Stock Exchange is one eighth of one per cent. each way on
a par value of the security purchased or sold. A _point_ means one per
cent. on the par value of a stock or bond. _Stock privileges_ or
_puts_ and _calls_ are extensively dealt in abroad and to some extent
here. A _put_ is an agreement in the form of a written or printed
contract filled out to suit the case, whereby the signer of it agrees
to accept upon one day's notice, except on the day of expiration, a
certain number of shares of a given stock at a stipulated price. A
_call_ is the reverse of a _put_, giving its owner the right to demand
the stock under the same conditions. A _put_ may serve as an insurance
to an investor against a radical decline in the value of stocks he
owns; a _call_ may be purchased by a man whose property is not
immediately available, but who may desire to be placed in a position
to procure the shares at the _call_ price, if they are not below that
in the open market when he secures the necessary funds. The speculator
usually trades on _margins_. If he has $500 to invest he buys $5000
worth of stock, his $500 being ten per cent. of the total amount. He
expects to sell again before the remaining amount falls due. The
_margin_ is usually placed by the speculator in the hands of a broker
as a guaranty against loss. Although these brokers are really agents
for others, yet _on 'change_ they stand in the mutual relationship of
principals. A _margin_ is merely a partial payment, but a broker
buying stock for a client on _margin_ is compelled to wholly pay for
it. If he has not the necessary capital his usual custom is to borrow
from banks or money-lenders, pledging the stock as collateral
security. In foreign exchanges the element of credit enters more
largely into the conduct of business. Where the credit of the client
in London is established his broker does not, ordinarily, call on him
for any cash until the next "settlement day." A _wash sale_ is a
fictitious transaction made by two members acting in collusion for the
purpose of swelling the volume of apparent business in a security and
thus giving a false impression of its value. Stocks sell _dividend-on_
between the time the dividend is declared and the day the books of the
company close for transfer; after that they sell _ex-dividend_, in
which case the dividend does not go to the buyer. When a company
decides not to declare a dividend it is said to _pass its dividend_.
To sell stock _buyer 3_ is to give the buyer the privilege of taking
it on the day of purchase or on any of the three following days,
without interest; and to sell stock _seller 3_ is to give the seller
the privilege of delivering it on the day of purchase or on any one of
the three following days without interest. _Buyer 3_ is a little lower
and _seller 3_ a little higher than _regular way_ when the market is
in a normal condition. _Bucket shops_ are establishments conducted
nominally for the transaction of a stock-exchange business but really
for the registration of bets or wagers, usually for small amounts, on
the rise or fall of the prices of stocks, there being no transfer or
delivery of the commodities nominally dealt in. There are thousands of
these counterfeit concerns throughout the country conducted without
any regard for legitimate commercial enterprises.