“Say,” says he, “can you tell me, Zadok, what an option is, and how it works?”
Well, sir, Zadok jumped right up and danced. “I knew it,” says he. “I knew Marcus Tidd would see the opportunity. I knew he would never miss it. What is an option? That’s what he asks. You heard him. Now listen and Zadok Biggs will explain. He will make an option so clear to you that—that even Plunk Smalley will be able to make one with his eyes shut.”
“Well,” says Mrs. Tidd, “what is an option?”
“The man who wrote the dictionary,” Zadok explained, “says an option is a right to make a deal or not to make it before a certain time. Not very clear, is it? I will enlighten you—make it plain to you is the customary way of saying it. Suppose I want to buy a cow from Mr. Tidd. I want that cow, and I don’t want anybody else to get it before I do. But, alas! I haven’t enough money to pay what Mr. Tidd asks. What do I do? I take an option. I go to Mr. Tidd and say, ‘Mr. Tidd, I will give you a dollar if you will agree not to sell that cow to anybody else before next Tuesday, and if you will agree to sell it to me any time before Tuesday for forty-one dollars.’”
“That’s too much for a cow,” says Mrs. Tidd.
“This is an imaginary cow,” says Zadok. Then he grinned all over. “That kind is more expensive, ma’am, because they don’t eat up any fodder.... Well, that’s an option. It’s where somebody else agrees to sell you something on or before a certain day, and not to sell it to anybody else in the mean time. Understand?” He said that to me, because, I expect, he thought if I understood it it must be clear to everybody else.
“But,” says I, “suppose you pay a dollar for the right to buy Mr. Tidd’s cow on Tuesday, and then when Tuesday comes you haven’t any money?”
“Why, then, Plunk, Mr. Tidd can sell his cow to anybody else he wants to.”
“But don’t it cost me anything?”
“Nothing but the dollar you paid him to wait till Tuesday for you.”