More Bullet Questions...

Q

qazmax

I have a couple of quick questions regarding bullets...

How do they appear in your positions summary?
e.g long one Bulet or Long Stock, Short Call, Long Put

Do bullets usually come in increments of 100 (shares of stock) or 1000 or are they adjustable?

Do the shorts stock positions created against the Bullet have to be closed before the end of the day? If so at what time usually? Does this happen automatically if not closed manually?

How many strikes above the stock price is common?

I know answers may vary by firm but i was hoping for some general feedback...

Thanks,



:)
 
have a couple of quick questions regarding bullets...

How do they appear in your positions summary?
e.g long one Bulet or Long Stock, Short Call, Long Put



You are confusing bullets with conversions


But it just shows up in my bullet window on Hammer as 2000 IBM for bullets if I owned 2000 bullets on IBM


Do bullets usually come in increments of 100 (shares of stock) or 1000 or are they adjustable?

Adjustable some firms have minimums though.

Do the shorts stock positions created against the Bullet have to be closed before the end of the day?

If so at what time usually?

Whenever you want to

Does this happen automatically if not closed manually?

no
How many strikes above the stock price is common?

We don't know nor do we care. This is done by bullet firm. We do not see the strike prices.

I know answers may vary by firm but i was hoping for some general feedback...

Thanks,
 
How do they appear in your positions summary?
e.g long one Bulet or Long Stock, Short Call, Long Put

You are confusing bullets with conversions

It is my understanding that a Bullet is a over-the-counter, conversion with 1 day til expiration. The long stock of the conversion allows for a long sale by the day trader.

:)
 
Bullets are just long stock and a very deep in the money put with a one day expiration that is written by the bullet firm is what I've been informed.

Both versions would work....but option floor traders usually hedge shorts positions with deep in the money puts not long put and short calls as that is more expensive /time consuming.


I have to admit most traders don't think much about this so it is nice to see someone who is.


I 'm just waiting for a huge freefall than I highlight all the stocks in my basket that is created due to huge ATR's and hit buy bullets and sell.

and magic........I just bought 50 bullets and shorted 50 stocks without an uptick while the market is crashing.

Fun huh?
 
It is true that the hedge is basically a deep in the money put. But what allows you to sell long stock (and not short stock) is the fact that you pick up long stock on the conversion.

The calls have no value and the puts are always exercised.

When you sell the long stock against the purchase of stock in the conversion it leaves you with a synthetic short stock position via options. Which = short call and long a put. Since the calls are so worthless, everyone just refers to the position as a long put.

At least this is how I understand it...

:)
 
I heard people are still paying well over .01/share. This is like writing out blank checks to who you trade for. As a Customer I get .01/share, no strings attached.. it seems like one of the last ways for these "Prop" firms to rip you off.
 
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