For a time it was supposed that the ordinary policy of fire insurance partook of the nature of a bet, and there was doubt as to whether the Courts would enforce contracts of insurance, because it looked as though the insurer was saying to a man who wanted to have his house insured against fire, “I will bet you the value of you house that it does not burn down.” But we have long since departed from this infantile mode of looking at the situation and have learned to regard insurance as one of the conservative elements of modern civilized life, by which heavy losses are evenly distributed instead of coming with crushing effect upon the persons suffering the misfortune.
The capitalist who sells a “put” or a “call” performs precisely the same function as an insurer. He receives an equivalent therefor, and it is a means by which he can turn the securities in his hands with an intermediate profit, without serious risk, except that in the case of a “call” he may be compelled to change the character of his securities, or replace the securities which he has called from him, and in the case of a “put” he may be compelled to re-acquire the securities that he has parted with; but, distributed over a very large mass, and through different classes, of securities, these “calls” and “puts” will balance themselves and leave, if intelligently pursued, a resultant profit to the operator in the “puts” and “calls,” with a prevention of disaster to the purchaser of the privileges, as against excessive fluctuations in the market.
Respectfully yours,
SIMON STERNE.
H. W. ROSENBAUM,
60 EXCHANGE PLACE, NEW YORK,
Broker and Dealer in Options on Bonds and Stocks
Besides the usual Options (Puts, Calls and Spreads) with prices fixed at a certain distance from the market price of the Stocks or Bonds, I devote especial attention to the negotiation of Options (Puts, Calls and Straddles), with price fixed at the current market price of the Stocks, etc., which latter class of Options my experience has proven to be the most advantageous and ultimately cheapest.
I will also contract Insurances against loss on purchases or short sales of Stocks or Bonds, made through me, during periods ranging from one week to sixty days, and in quantities of from 100 shares ($10,000 Bonds), upwards.
The Premiums to be paid for such Insurance range from $112.50 per 100 shares upwards, according to length of time and character of security, and cover the whole loss which the speculator may incur on this transaction.
Circulars, Rates and Information furnished on application.