312 CORN 



Terms Used in Trading.* "There are many terms of the Board of 

 Trade of which the public has little understanding. Probably the 

 ones most frequently used with the grain markets are 'Bulls' and 

 'Bears'. A 'Bull' is one who beHeves in higher prices and who buys 

 for an advance. A 'Bear' is one who looks for lower prices and who 

 sells property which he does not possess but which he hopes to buy at 

 a lower figure than he previously sold at. 



"This is called short selling and the party making the sale is termed 

 a 'Short'. In other words the short seller is one who contracts to 

 supply another with a certain amount of grain at a specified price at a 

 future date and who believes that before the date of delivery has ar- 

 rived he will be able to purchase this grain at a lower figure than he 

 contracted to sell it for. When a 'Long' sells his property for more 

 than he paid for it, the operation is called 'ReaHzing' or 'Profit 

 Taking.' When he is forced to sell at a loss, it is termed 'Liquida- 

 tion', 'Stop Loss Selling', or 'Unloading'. When a 'Short' buys at a 

 lower price than he previously sold his property at, it is said that 

 he is taking profits. When he is obliged to pay more than he sold for, 

 or buy in at a loss, it is generally termed 'Covering'. 



"A 'Scalper' is a person, who, after he has made a profit on the 

 grain he has bought or sold, closes out the trade and pockets his gains, 

 repeating the operation several times. 



" 'Hedging' is an expression frequently used in the grain trade and 

 refers to the operation whereby a 'cash grain' dealer lessens his risk 

 by buying or selling 'futures'. For example, if a man or concern buys 

 a certain amount of "cash grain' that he or they have not an immedi- 

 ate market for, an equal quantity will be sold in the speculative market, 

 thus protecting the holder of the grain from a decline in prices. After 

 a buyer for the 'cash grain' is found the speculative sale is disposed 

 of by buying in the pit and the trade balanced up. This is called re- 

 moving 'hedges'. 



"On the other hand, if a dealer in "cash grain' makes a sale before 

 he has the grain in his possession he buys an equal amount in the 

 future market. Thus, if he is forced to pay more for his 'cash grain' 

 than he contracted to sell it for, his loss is oflfset by his purchases in 

 the pit. Naturally there are times when, even these methods fail to pro- 

 tect 'cash grain' dealers from losses, but it eliminates the possibiHty of 

 heavy loss and enables the "cash grain' man to work on a much smaller 

 margin of profit than he could under other circumstances. 



•Taken from article by Mr. E. A. Meinke in "Farming Business", May 1, 191S. 



