146 WHEAT PRODUCTION IN NEW ZEALAND 
(b) Speculative Transactions.—Technical terms used 
in the above will be explained as we proceed. These are 
the conditions necessary for the operation of future 
dealing, and a ‘‘future’’ may be defined as ‘‘a contract 
for the future delivery of some commodity, without 
reference to specific lots, made under the rules of some 
commercial body, by which the conditions as to the unit 
of amount, the quality, and the time of delivery are 
stereotyped, and only the determination of the total 
amount and the price is left open to the contracting 
parties.’’* Another important class of transactions are 
“‘eash’’ or ‘‘spot’’ contracts which are merely the out- 
right sale and purchase of goods for immediate delivery. 
These dealings may be purely speculative, as when a 
person makes cash purchases to settle future contracts 
previously made. Although they do not necessarily 
imply a cash payment, they do represent actual 
goods available in the market at the moment. A third 
important class of contracts are ‘‘privileges.’? By a 
‘‘privilege’’ a person acquires the right to buy from or 
sell to another person a certain amount of a commodity 
at a price agreed on. But there is no obligation, and 
the person has the privilege or option of completing the 
contract. Privileges are either ‘‘puts’’ or ‘‘calls.’’ The 
former is a contract made with a view to a fall in price, 
and the latter the reverse. In the case of the ‘‘put’’ by 
paying a fixed sum, a person acquires the right to deliver 
to a second person, the receiver of the fixed sum, or 
“put money,’’ a certain quantity of a commodity at 
a price agreed upon on a certain date. If the price has 
fallen by that time the seller will then purchase the 
goods and make the delivery according to contract. If, 
however, price has risen he will relinquish the ‘‘put’’ 
*Emery, ‘‘Speculation.’’ Page 46. 
