ok rs7 you explained this bullet thing to me and I think I missed something. From what you said it sounds like the "short against the box" strategy where stock is held long in one account an shorted in another ( done for tax reasons to lock in profits until after a deadline ).
bullets
- Thread starter bgn
- Start date
With my strategies I sometimes need a lot of small bullets in different stocks, like 100 shares of 20 different stocks, and quickly. I have to give a plug to ECHO because their system works great for my style, they only require 100 min. (I talked to other firms that had 500 min. or 1000 min. on each bullet) and they are cheap (.025, 100=$2.50) with no tickets, pay for how many you need.
I'm sure some other firms are probably this way, but no one has mentioned Echo yet and I have always been very pleased with their electronic bullet executions.
One main thing to ask each firm is how much they charge for bullet carrying costs. This is the interest charge most every firm very subtlely charges each time you buy a bullet. I think at a lot of firms they charge you three days worth of interest for the holding the bullet, even though it is only good for one day. This actually adds up to be a LOT of money for most guys, even though they can rarely figure out the exact amount because it is lumped into their interest charges.
This is another main reason I like Echo, they are the only firm that I have found that does not charge ANY carrying costs whatsoever for buying or holding the bullets. They cover all the interest for all traders for bullets. This is a good opportunity for someone to tell me if their firm does this too, but last time I checked Echo was still the only one.
I'm sure some other firms are probably this way, but no one has mentioned Echo yet and I have always been very pleased with their electronic bullet executions.
One main thing to ask each firm is how much they charge for bullet carrying costs. This is the interest charge most every firm very subtlely charges each time you buy a bullet. I think at a lot of firms they charge you three days worth of interest for the holding the bullet, even though it is only good for one day. This actually adds up to be a LOT of money for most guys, even though they can rarely figure out the exact amount because it is lumped into their interest charges.
This is another main reason I like Echo, they are the only firm that I have found that does not charge ANY carrying costs whatsoever for buying or holding the bullets. They cover all the interest for all traders for bullets. This is a good opportunity for someone to tell me if their firm does this too, but last time I checked Echo was still the only one.
You know something? I think that if a trader does not understand what a conversion is, they are more than likely not at the point of their trading careers to make it an issue of relevance.
Just short listed stocks on upticks. It is the best way to learn to trade anyway. It is rare that you cannot short a nasdaq stock because of the uptick rule. If you can't, you are chasing the stock down in all likelihood. Or the stock is too thin to trade in the first place. Bottom line, when the time comes to even have a use for "bullets" (a term I am still getting used to, even though I have traded them for years as conversions and reversals) you will know what they are and understand their purpose.
By the way, I don't use them.
PS: I don't mean to come across as being dismissive of this question. All questions should be answered. I think this one was more than a few times. It just seems to me that importance is being put on something here that really doesn't merit the time.
LMAO 2funny
rs7
Thx for all your trouble.......I'm familiar with conversions/reversals, you got me thinking again !!
Thx for all your trouble.......I'm familiar with conversions/reversals, you got me thinking again !!
It seems there is a lot of confusion surrounding this subject and I suppose there is good reason for this. As a prop trader I have been using this tool for some time now and for my type of trading I have to admit that it is a necessity. Despite my use of this tool I still get confused every time I read a thread regarding this subject. For me it boils down to this...... it allows me to SHORT ON A DOWNTICK! I don't care exactly how they are constructed as long as it works.
As I understand the terms Bullet and Forward Conversion (right or wrong) a Bullet is a 1 day version of a Forward Conversion and a Forward Conversion can be set up to be in effect for months at a time.
For those of you out there who know the mechanics and rules surrounding Bullets / Conversions I have a question:
If you have a Bullet or Conversion for 1000 shares and you are trading a default of say 4000 shares and the software you are using allows you to short 4000 shares on downtick because you have a Bullet are you illegally short 3000 shares?
If you are illegally short and are a prop. trader who's responsible for the illegal short, the trader or the firm?
What are the penalties for such an infraction?
( I think I know the answer to these questions just wanted to hear some opinions)
MACD
As I understand the terms Bullet and Forward Conversion (right or wrong) a Bullet is a 1 day version of a Forward Conversion and a Forward Conversion can be set up to be in effect for months at a time.
For those of you out there who know the mechanics and rules surrounding Bullets / Conversions I have a question:
If you have a Bullet or Conversion for 1000 shares and you are trading a default of say 4000 shares and the software you are using allows you to short 4000 shares on downtick because you have a Bullet are you illegally short 3000 shares?
If you are illegally short and are a prop. trader who's responsible for the illegal short, the trader or the firm?
What are the penalties for such an infraction?
( I think I know the answer to these questions just wanted to hear some opinions)
MACD