Bullets at a Retail Firm?

If the bullets are a usefull tools presently, it should be no longer the case because in the plan of the SEC, the downtick rules should drop this automn .
 
Pointdirex also offers Bullets at .01/share. Right now you have to call in the bullets. They said at the end of the month all bullets will be automated. Also what i like better is conversions, much more expensive but expire at the end of every month.

Bullets are more useful when you have story stocks or stocks on some days you have more volume and you feel you can take advantage during that particular day.

Conversions are better for your bread and butter stocks that you trade day in and out.

Hans
 
North,

Could you point us to a link, like the SEC or a news article, that says that the downtick rule will dissapear.

Sorry, don't mean to be mistrusting, but that sounds too good to be true.

Thanks,

Chris
 
Originally posted by MUChris
North,

Could you point us to a link, like the SEC or a news article, that says that the downtick rule will dissapear.
More...

The information come from IB-Forum. I think that was a June's post from IB Steve that have talken about the plan of the SEC this year. The major announced should be do this year, the first was SSF (Future on Stock) with a margin of 20% that have been announced recently, the second is for to remove Donwtick Rule. Just check recent post on IB forum.
 
Originally posted by def
Bullets:
I started to write a proposal - for starters Timber Hill can possibly offer a better bullet rate to what prop firms are paying. It would just be a matter of putting in the resources on the programming side.

One thing I am not clear on, do the regulators allow bullets for retail? If it's a grey area, forget it. It is not worth the regulatory hassle. Look what is happening to Datek. They took the lenient approach to freeriding on cash transactions. Many of you gave IB grief as they took the strict interpretation to daytrading. As a result of Datek's interpretation, their merger/buyout may fall through.

Finally, come October SSF's will be available. Assuming decent SSF spreads, shorting on a down tick via bullets will be more expensive than trading a SSF. Thus, it may not even be worth the effort.
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Def,

It would be great if IB had bullets at a .01c per share, 100 share minimum.

I agree that IB should never do something silly that may cause it harm to it's future. However, saying that SSF's will solve the downtick rule is sweeping the dust under the rug. First, only some stocks will be available to trade as a SSF. In addition, how will you know that the SSF is "in line" with the underlying - afterall, when these things are new, there is a tendency for them to be trading above/below "Fair Value" for extended minutes at a time...

Honestly, I think that I would like Bullets for at least the coming year. When all the SP500 stocks have SSF's, and the arbs become lighting fast at keeping the SSF's in line, I _THINK_ I will not have any need for bullets anymore...

nitro
 
heh heh heh- i've got bullets and i like them alot (but they are too damn expensive) if you gave bullets to retail customers then i couldn't get short as easily- and we wouldn't want that now, would we??
 
Pardon my ignorance here but what would prevent a retail customer who just trades one or two stocks from creating their own bullet which can then be re-used over and over? I can see where it would tie up capital since you have to actually buy the stock to create the near neutral position along with buying/selling the calls/puts. I say near neutral because it's unlikely that the calls and puts would be exactly offsetting price-wise but that shouldn't matter in the long run because the bullet is basically permanent. It could be re-used continuously as long as the calls and puts are refreshed when they expire.

Clearly this wouldn't work if the trading method involves many stocks. However what's to prevent a person trading just only one or two stocks from doing this?:confused:
 
Many retail firms offer bullets for their retail customers. You don't have to be at a "pro prop" firm to use them. If your firm does not offer them then they are behind the pack. Just like what many firms do/did with ecn's, bullets are usually marketed up when the cost is passed on to the customer.
 
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