are there "bullets" for nas stocks?

babak,
I believe you have to be with a prop firm and have a series 7 to use bullets. I'm not sure so others can comment.

as for hitmans comments on not shorting w/o a bullet - i totally disagree. Not having to follow the downtick rule is an advantage but with decimlization it is much easier to get a fill. in any event, it probably comes down to your trading style. If you are trying to scalp out for quick gains into a moving target, you probably would want a bullet. However, not all short term traders follow this style.

 

To address thread for hitman on different specialist some do headfakes others just post what they truely have. It depends on the specialist.

I'll find the link for the bullets thread and link it in here:


(when I get some time)


The reason for bullets is if the market is truely in a freefall there are no upticks till support has been found. I've watched stocks go down 6 points before someone hitting buying an offer. Why would they otherwise if market heavily one sided.

Why are they only for professionals??
MARGIN.

it takes a lot of capital to buy the stock and an artifical option position to make it worthwhile. Most traders can't get significant size to do this. Meanwhile professionals have access to a lot more capital.

I trade with the trend. I short when a stock is falling and when it is near an extreme high. Usually though if something is parabolic on the upside it can continue for awhile longer. When it falls there are no upticks. I've had orders sitting for quite a long time. I did a test about this recently. Bought a 1000 share bullet on a stock and waited for the freefall.

I shorted the stock first the way most traders would do it. I then waited a minute and hit a market sell order (for my bullet) and was filled on the market sell order in 5 seconds. Meanwhile my trade listed as a short held for another 8 minutes till an uptick was present....

I made money on the bullet trade but lost on the natural short trade. The natural short was also first in line.

rtharp

 

Magna:

It depend on the stock you trade. Typically I find thinner stocks to trend a lot more smoothly than liquid ones. Any size in a stock like GE or IBM probably doesn't matter, but in a stock like AGN it can be vital. Also first and last hour of the day I typically don't see much fake sizes. Yeah, there are traps, like a stock goes up a little then tanks, but the sizes are usually real.

I also don't mean buy just because there is a BID, with the exception of a stock that just opened, I would typically want to see some sort of a BID before I jump in, no 2x10's. Something like 30x10 is enough for me, in other word, wait a little until the tape confirms.

Def:

I am not saying you can't make money going natural, I am saying bullets are far, far, far superior in stocks that trade under a million shares a day. There are some serious advantages of trading thinner stocks (cleaner tape, easier specialist, BID/ASK usually mean something), and even in more liquid stocks, sometimes the bullet is the only way in.

I always scale into the position, and without bullets, it is not possible. I don't hold stuff for multiple points, just one momentum move is all I look for, so the style is different as well.

I didn't feel bullets are a huge advantage either, but back in March there was a day market tanked off the open, and I splitted a few bullets with a fellow trader to save on cost, it changed the way I look at bullets forever.

I trade via tape, and if you can get a natural filled, chances are, the stock will usually move up a little more before/if it tanks, you need to give at least an extra 10 cents wiggle room to natural shorts, on 1500 shares that alone is $150, and that's the cost of two 1500 shares bullet, not to mention you usually have to get your full position in one shot when the tape is moving against you (otherwise you won't get the uptick fill). My max size is 1500 shares I already see a big disadvantage, if you do bigger sizes, bullet is not an alternative, it is a standard. If a stock filles 3000 shares on a natural, you don't want to short it.

Yeah, occassionly I still take natural shorts, but for all of my serious positions, it is either long or bullet short . . .

 

Once single stock futures begin to trade around the end of this year, these "bullets" may be shooting blanks. For those unfamiliar with trading in futures, there is no prohibition on shorting with regard to tick direction.

Although liquidity may be an issue in the beginning, I believe that trading in single stock futures will eventually become very popular, especially since they will become eligible to be traded on the options and the futures exchanges as well as the stock exchanges and therefore the ECNs.

Moreover, the new margin rules governing pattern daytraders to be effective this fall don't appear to catch trading in single stock futures. This will no doubt be a glaring loophole but it just goes to show that the changes in the financial markets do not wait for the regulators to catch up. It is something for those of you in the under-$25,000 group to think about.

 

Lol, for some reason I had this LONG biase today, I don't know why I have a lot of trouble trading technology stocks in general. They seem to be very choppy for me on most days that why I usually don't look at SOX until past 10AM.

Just in case you are interested, I crammed my way to S7 in 2 and 1/2 weeks, self-study. It is a cram exam, study you will pass.

All the perks in the world won't help if you got the basic direction wrong :-(