The origin of this phrase is unclear and despite many people's research it is still mostly unknown. There are some theories but none of them seem plausible. You can read about those various theories here . What it does mean these days is to deceive or trick someone in a playful or funny way.

There are a few different stories about how this phrase came into being and how it came to mean today's meaning - a large, possibly exorbitant, amount of money.  But back to possible origins of the phrase. One hails back to war times when amputees were paid a sum of money for limbs lost.  

There are many theories about the origin of this phrase but one thing is clear - it originated in the theater world. Read about its many possibilities here .