Conversions At Hold Brothers And Generic?

[grimer11]

I've heard conversions have been made available at Hold Brothers and will be made available to traders at Generic sometime next week.......Would someone be nice enough to either confirm or deny this, and if this is the case what is the cost structure (ie how do they work in regards to cost, number of shares, and duaration)?........Are any other prop shops offering similiar products in lieu of "bullets"? Thank you in advance for any and all responses.


grimer11

 

[Mecro]

Quote from grimer11:

I've heard conversions have been made available at Hold Brothers and will be made available to traders at Generic sometime next week.......Would someone be nice enough to either confirm or deny this, and if this is the case what is the cost structure (ie how do they work in regards to cost, number of shares, and duaration)?........Are any other prop shops offering similiar products in lieu of "bullets"? Thank you in advance for any and all responses.


grimer11

I know Generic is gonna have them and Im sure Hold will have to also. Those traders pretty much depends on shorts scalps to make any money.
To actually get conversions for oneself requires huge margin but from what I heard, Generic is going to have the groups of traders somehow structure like a group deal to make it more like bullets used to be.
Conversions are actually much cheaper than bullets when your consider the length of time for which they last. But Im sure Generic and Hold will make them even more expensive since so many traders are desperate and will pay.

 

[RJW39]

Hey merco,
relax with the "desperate" I trade at generic and we don't depend on bullets to make money.
they are a nice tool, but our office has done quite well without them.
you talk like you have facts but in your own post you admit your info is hearsay. if the cost structure is no good we won't use them.

 

[grimer11]

the cost structure ive been offered is 500 usds for a month's conversion......I honestly have no idea how this would compare to other firm's deals but I am trying hard to find out so I can make some very important decisions about where I shall spend the next very important 2 years........best of luck to all.

grimer11

 

[I Missed Boat]

Quote from Mecro:


Conversions are actually much cheaper than bullets when your consider the length of time for which they last. But Im sure Generic and Hold will make them even more expensive since so many traders are desperate and will pay.

Unfortunately, this is not the case. Conversions cost somewhere between $500 and $1,000 for 1,000 shares, depending on the option spread, interest/stock price, time, etc. The same 1,000 of bullets for a month would've cost about $300. What's more, with bullets you had the choice to buy bullets for different stocks everyday, and to buy the number of bullet shares (in increments of 100) you wanted. But, perhaps it will be better than nothing.

 

[big_jdez]

The biggest cost portion of a conversion is the interest your firm will charge for the use of capital. Because you'll own 1000 shares of GE @ $30, that means $30,000 tied up, plus the cost of the options plus the commish plus the spread cost. The lower the stock price, the lower the cost!!

 

[cashonly]

Quote from grimer11:

the cost structure ive been offered is 500 usds for a month's conversion......I honestly have no idea how this would compare to other firm's deals but I am trying hard to find out so I can make some very important decisions about where I shall spend the next very important 2 years........best of luck to all.

grimer11

Our cost structure is a little different. Generally, it costs 14-20 cents/share (specific price depends on how good a deal we can get at the time). We don't charge any overnight carrying fee unless you're carrying a real boatload of conversions. The clearing firm does charge a margin interest of 2%, so with an example of $30/share for 1000 shares, it would be a one-time cost of about $140-$200 to put on and the margin interest would be about $50/mo. The conversion is good for as long as you specify. People typically get them for 2-3 months.

Even when we had bullets, I think the rule of thumb was if you're going to get a bullet on the same stock more than 10 times in a 2-3 month period, a conversion is cheaper in the long run.

 

[axehawk]

Quote from cashonly:

Our cost structure is a little different. Generally, it costs 14-20 cents/share (specific price depends on how good a deal we can get at the time). We don't charge any overnight carrying fee unless you're carrying a real boatload of conversions. The clearing firm does charge a margin interest of 2%, so with an example of $30/share for 1000 shares, it would be a one-time cost of about $140-$200 to put on and the margin interest would be about $50/mo. The conversion is good for as long as you specify. People typically get them for 2-3 months.

Even when we had bullets, I think the rule of thumb was if you're going to get a bullet on the same stock more than 10 times in a 2-3 month period, a conversion is cheaper in the long run.

I agree with you Cash, and "I missed the boat" is wrong.