What will be the end result of the elimation of bullets be on pro firms/traders?
- Thread starter gimp570
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Quote from gimp570:
In my opinion one of the big reasons the SEC did away with bullets was because, of a large number of day traders using bullets, when these funds were trying to short stocks. The traders would see a market short (an offer following the stock down) then use a bullet, hit the bid and make the funds pay up for there short. They simply got sick of having to pay up and these big players are much more important to the stock market then day traders so they simply did away with bullets
didnt funds and program traders at big houses use them also?
In my opinion one of the big reasons the SEC did away with bullets was because, of a large number of day traders using bullets, when these funds were trying to short stocks. The traders would see a market short (an offer following the stock down) then use a bullet, hit the bid and make the funds pay up for there short. They simply got sick of having to pay up and these big players are much more important to the stock market then day traders so they simply did away with bullets
didnt funds and program traders at big houses use them also?
here's a question for the prop traders and those who know about prop firms:
are there going to be problems getting out of longs due to a firm's aggregate or net position on a stock?
at the prop chop shop i work at, we've been experiencing HUGE order entry problems. couldn't get out of long positions due to what the firm called "the aggregate rule"...so i couldn't sell my longs in order to exit, b/c firm was net short that particular stock, so i had to wait for an uptick in order to sell short in order to close my position...awful, can't get out when u just want out.
so basically am wondering if this is a problem that is affecting all prop shops or if it is purely exclusive to my own..
if u have any answers as to what is going on here, i'd appreciate them..i just want a clearer understanding of what is happening here, and i don't necessarily trust that my firm is telling me the truth..
are there going to be problems getting out of longs due to a firm's aggregate or net position on a stock?
at the prop chop shop i work at, we've been experiencing HUGE order entry problems. couldn't get out of long positions due to what the firm called "the aggregate rule"...so i couldn't sell my longs in order to exit, b/c firm was net short that particular stock, so i had to wait for an uptick in order to sell short in order to close my position...awful, can't get out when u just want out.
so basically am wondering if this is a problem that is affecting all prop shops or if it is purely exclusive to my own..
if u have any answers as to what is going on here, i'd appreciate them..i just want a clearer understanding of what is happening here, and i don't necessarily trust that my firm is telling me the truth..
Hey Don,
Bullets accounted for more than 30% of revenues for many firms. Alot of traders (specifically high volume ones) relied heavily on bullets for their trading. I know many traders, myself included, that their volume and profitability will be drastically reduced. Thier aren't many alternatives that will be cost effective(long term conversions...) if one is going to do alot of them. How can you say this is no big deal? The prop firms were hurting before this I don't know how many will remain after this.
Bullets accounted for more than 30% of revenues for many firms. Alot of traders (specifically high volume ones) relied heavily on bullets for their trading. I know many traders, myself included, that their volume and profitability will be drastically reduced. Thier aren't many alternatives that will be cost effective(long term conversions...) if one is going to do alot of them. How can you say this is no big deal? The prop firms were hurting before this I don't know how many will remain after this.
Soooo, why can't you Prop guys just buy as the market is going up and sell as it is going down like anyone else? (for shorts, you may need to expand your time frame so you can get filled on an uptick or else trade only Naz stuff short)
What, are you saying Pros can't compete with little retail traders and Big Money showing huge size/order prints without the unfair crutch of bullets?
I didn't know that the average Prop edge was that dull.....
Personally, I think the elimination of bullets may take some of the "noise" (spikes) out of stock movement - noise which mostly just hosed the little guy to hit his stops or shake him out.
Just my .02
Sure do. No, not in IBM but obviuosly in the thin stocks. Hedge Funds use bullets too. Day traders are like mini hedge funds minus the LT strategies. It is trading. Buyers move out of way when then see stock plumeting from bullets hitting the bid. Bullets posted quickly and automatic execution of your equity sell order is nice software. Like Andover's Hammer.
This is what's going on in trading. or what was going on until bullets were taken away. It was a huge tool in the trading arena. the great years are over. the good traders will shove on and the smart firms (like don claims his is - and very well could be!) will do what they gotta do.
My old Worldco did what they had to do and closed down. i think if firms are lean on overhead and they jack up the rates on stocks, since bullet revenue is gone, they may do OK. But I think rates gotta go up and definately not down anymore. they gotta be rock bottom.
just my 2 or 3 cents....
My gawd, you would think that bullets, direct plus, open book and so on have been around forever, huh? How did anyone ever make money trading before? You chicken littles are hilarious. Yes, pro firms and their traders do/did rely heavily on bullets. But there are still plenty of moves and money to be made. RELAX.
And for those of you that think this is all a result of little 10 lot daytraders whacking the bid with nx, please continue to trade...the market is that much better with you in it.
And for those of you that think this is all a result of little 10 lot daytraders whacking the bid with nx, please continue to trade...the market is that much better with you in it.
Quote from Don Bright:
This is such a minor thing, and we have all (yes, even our "competitors") made alternative plans....our traders are fine.
I'll admit that we were expecting January, not November, but hey, what the heck.
As I said in another post..."not even a reason to "spin" this this whole thing"...it's just no big deal.
It will certainly be a sad day if and when the end of trading really comes...but we'll all be dead and buried by then....and the "smart people" will have already adapted....much like we have done with the bullets.
Don
What are the alternative plans?
Sorry, but I wouldn't say "no big deal" if it weren't true.....Bullets certainly don't account for any big percentage of our profitability (30%, wow, I'd be reall surprised if this were true with the bigger firms). I can't speak for the other firms, but many of our traders prefer conversions because of their trading styles anyway. We like the "challenge" of adapting to new rules....this is what makes for a real "career trader"...and firm of course.
This may affect a small percentage of our people for a short period of time until they adapt...but our people are pretty good at adapting quickly. Not to worry...
Don