Bucket Shop

A bucket shop is a place where bets are made on regular exchange quotations. No actual transactions take place.

The margin is put up by the customer and a commission is charged for buying and selling the same as on an exchange. When the quotation shows a profit to the customer he is privileged to demand the profit; when the limit of the customer's margin has been reached the customer has lost his bet and the transaction is closed. There are many large as well as small bucket shops in existence in the cities of the United States, and an enormous amount of trading is done in them. Inasmuch as more than 80% of the ordinary speculators fail to make money in the long run, it will be seen that the chances of money being made by the bucket shop are as five to one in comparison with the chances of the customer. In ordinary times, therefore, the bucket shop is almost sure to make money. It is only in the times of great bull movements, when for short periods the public in the market cannot help but make money in spite of their mistakes, that the bucket shop is apt to be on the losing side. At such times the bucket shop usually closes its doors, for the time being, before it has undergone very heavy losses. It is unnecessary to say that bucket shops are illegal, and from time to time, as charges are proven against them, they are closed up by the civil authorities.

Bull

This is the title usually given to a speculator in Wall Street whose attitude in relation to future prices is optimistic. That is, he believes in higher prices and works to secure them. A bull is therefore anyone who buys or favors buying stocks, grain, cotton or any other speculative commodity in the expectation of selling it at a higher price. See also Bear.

Buyers' Option

In securities bought on the buyers' option the buyer may demand delivery of the stock on any day within the time specified on one day's notice to the seller. The buyer, unless the contract is "flat," pays the seller interest at the legal rate on the price of the stock up to the day of delivery. No contract or buyers' or sellers' option for less than four days, or for more than 60 days, can be entered into on the New York Stock Exchange.

Call

A call on a stock or bond is a contract or written agreement binding the issuer to deliver to the holder the security named in the agreement within a specified time at a particular price, if the holder shall so demand. For example, A signs a promise to deliver 100 shares of a given stock to B at 110 at any time within 60 days if B makes a demand for it. A sells this privilege to B for, we will say, $200. If, within the 60 days, the stock rises in price so that B can sell it at a profit above the cost of the privilege and commissions for selling, B then sells the hundred shares and calls on A to make the delivery of the certificate to him. Naturally the stock must go above 112 1/8% before there is any profit in it for B. If the stock declines or does not go above 112 1/8%, B does not call for it and A makes the $200 on his risk, B losing just this amount. See also under Privilege. See also Put.

Call Loan

A call loan is a loan which is payable on call or demand. In Wall Street a very large amount of money is loaned on call by the banks to the brokers, the latter in all cases supplying collateral to cover the loan. By the New York Stock Exchange rules a demand for the payment of a call loan must be made before 1 p. m. on any given day and the payment must be made at or before 2.15 p. m. the same day. Also notice must be given to the loaner of intention to pay a call loan before 1 o'clock and the payment must be made by or before 2.15 o'clock.

Called Bond

A called bond is one which carries a clause giving the company issuing the bond the right to redeem the principal at a certain figure and at a certain time. Said right having been exercised, interest on such a bond usually ceases after the bond is called.

Car Miles

A railroad term which signifies the number of miles traversed within a given time by all the cars on a railroad. The number of miles traveled by all cars, divided by the number of cars, shows the average number of miles traveled by each car. Most railroad reports give these figures when submitting statements of operations and earnings to their stockholders.