COTTON PRICES AND MARKETS 33 
to himself nor to any member of his firm. Dealing in " puts " and 
" calls " on the floor of the exchange is forbidden. 
In trading for their clients, members are called upon to execute 
several different kinds of orders. The most frequent order is known 
as a " market order," which means that it is to be executed imme- 
diately at the best price obtainable. The client, for instance, 
instructs the broker to buy two Octobers (200 bales). When it is 
done he wires: "Bought two Octobers at 28.10." There are various 
kinds of " limited orders." It may be to buy or sell a named month 
at a stated price or at a designated time. " Stop-loss orders " are 
not infrequently given in periods when wide and rather rapid fluc- 
tuations are taking place. The buyer or seller, as the case may be, 
sets a price at which he wishes his contract closed out, should the 
rise or decline reach that point. 
" Switching orders " are used, especially by merchants carrying an 
unsold stock of cotton. They merely move the hedge from one 
month to another that may offer more favorable terms. Likewise he 
may switch his hedges from one market to another. 
" Conditional orders " are placed with a broker pending the issue 
of certain events. The order may be to " buy December if the Gov- 
ernment crop report for September 25 shows a condition of less than 
57," Finally there are " discretionary orders," orders to buy or sell, 
as the case may require, at the time and price the broker thinks best. 
Some firms refuse to execute discretionary orders. 
The price of all sales for all contracts for the future delivery of 
cotton must be reported promptly by the seller to the collector of the 
exchange, giving the exact time and terms. Transactions out of line 
of bids and offers and those not entered into by an outcry across the 
trading ring are not recorded. 22 
THE FUTURES MARKET IN ACTION 
Opening calls. — The futures markets in New York and New Or- 
leans are opened for business at the prescribed hour by what is known 
as calls for the purchase and sale of cotton for future delivery. In 
addition to the opening and closing calls there are two other calls 
during each full day; one between 11 and 12 a. m., and the other 
between 12 and 1 p. m. The calls are by months beginning with the 
current and continuing until each calendar month shall have been 
called. After opportunity has been given for making bids and offers 
for each month, the members are privileged to trade in any month at 
any time. Most of the trading is done between calls. 
There is no essential difference between trading under call and the 
ordinary ring trades. In case of the call, the offer to buy or sell is 
repeated by the superintendent of the exchange. It is like an auction 
in that anyone has a right to accept the offer or make a counter offer, 
but it does not involve the original offer, and offers are made at a 
definite price. The first man who accepts the offer to buy or sell 
closes the contract, regardless of subsequent offers. Trades between 
calls are essentially the same except that they go directly across the 
ring between buyer and seller. An offer across the ring may be 
22 Rule 41 of the New Orleans Cotton Exchange, 1920. 
6103°— 26 5 
