You read it rightly, MarianneR. The privateers went after local enemy trade, i.e. English trading ships, and Captain Wentworth, in his sloop the Asp, went after the privateers. So the Captain was protecting British trade in the Caribbean.

When ships were taken by an enemy, they lowered their flag to surrender - called striking their colors. The capturing ship then put a prize crew aboard - lead by a junior officer and a few of the winning ship's sailors. The prize crew would secure the captured crew and officers below deck and would take the ship into a friendly port to be either bought by the Government or sold. As Mrs. Croft mentioned, Bermuda and Bahamas had British ports in them. The cargo was also sold. There was a bounty on the captured crew as well.

Depending how far away the friendly port was, the prize crew either rejoined the ship later or waited for other orders. So taking prizes could be profitable, but it also depleted your crew of experienced men and officers.

All this was handled by a prize court and Captain Wentworth would have had a prize agent who handled the transfer of funds from the government to him. The process could take a long time and if the ship turned out to be a neutral or not a lawful prize, the capturing crew could loose their money. There were all sorts of rules concerning prizes and their capture, sale and distribution.