Another popular form of trading in privileges is to buy or sell half the amount named in the privilege when it becomes “good” through market action. If B holds a “put” on 100 Steel at 37, he may, at that price or below, buy 50 shares. He is now in a position to profit by either an advance or a decline. If the price advances to 40 he has three points profit in the 50 shares purchased. If, on the other hand, the market declines to 34, he still gains 3 points on 50 shares, for his “put” protects him against a loss in the 50 shares purchased and he can purchase another 50 shares at 34 and deliver to A at 37. In short, when he makes his 50 share purchase at 37, he is both short and long of the stock and must gain on a movement either way in the market price. A “Straddle,” as the term is applied to privileges, is a combined “put and call”. The purchaser gains on a movement in either direction. The general rule is that the gain is to be represented by a market change representing an excess of the amount paid for the “Straddle.” Thus if A sells to B for $250, a straddle on 100 shares of Steel, when the current market for the stock is 40, B is in a position to gain by either an advance above 42½ or a decline below 37½. The purchasers of privileges are sometimes perplexed by market changes which are brought about by dividend payments. The rule is that the dividend always goes with the stock. The simplest way to arrive at correct figures is, to mentally lower the price of either the “put” or “call,” by the exact amount of the dividend payment. Thus, if B holds a “call” on Steel at 43 and a dividend of 2% is paid on the stock during the life of his option, his “call” becomes operative at 41 as the dividend goes to him. If he holds a “put” at 37, and 2% dividend is paid on the stock, his “put” is not operative until 35 is reached, as the dividend goes to the maker of the “put.” Privileges in grain or other commodities are based on the same general rules and principles as those on stocks. These privileges are heavily dealt in on wheat and corn in Chicago. They are designated, however, as “ups” and “downs” in order to evade local laws prohibiting transactions in “puts and calls.” The “ups” are calls; the “downs” are puts. Most of the grain privileges handled in Chicago, or based on Chicago prices, are of a day to day character, insuring only for the next day’s price changes. The ordinary charge is $1 per thousand bushels. For $1, therefore, the small gambler, or speculator, may purchase, say a call on 1,000 bushels of wheat at 90½ when the last price recorded was 90. If wheat reaches 91½ during the next day’s session, he has a gain of $10 less the cost of the “call” and brokerage.