Discussion in 'Options' started by c_verm, Oct 13, 2003.
What is a bullet? and how do you get $0 commission trading that so many ppl are talking about?
You will find many, many excellent discussions about Bullets by going to the Search function and working through there.
Bullets allow a trader to sell a stock without the complications of a short sale, i.e. upticks or borrowing shares.
Search also for "married puts"... generally only available to licensed traders, not the retail traders. You can, however, buy a conversion which gives you the same benefits (search the web for "married puts").....
Zero commissions generally come from a Firm that is "selling your orders" or "trading against you." You might save $7 on a trade, but if you lose a dime on 500 shares, it's hardly worth it.
Bullets are available to retail firms not the exclusive domain of pro shops. In addition, if you trade the same stox, you'd be better off buying a long term married put so you don't have to pay commish every day you want to hit bids. They are available to Penson correspondent brokers and Assent.
I spoke with Penson, Transcend, and Radez, all of whom say that they don't have any retail firms using bullets. I don't really see why retail people can't use them (this is America,lol), but the procedure (having all orders routed to the broker), and the margin seems to be ithe concerns.
I'd like to speak to someone who uses bullets on a regular basis from a pure retail firm (perhaps Def?).... it seem that if anyone did it, it would Interactive.
And, yes, I agree, longer term conversions/married puts are advisable if you buy bullets in the same stock more than a few times per week.
I used them in a SIPC retail account with a Penson broker based in Woodclif lake NJ. Anyone interested in retail bullets use google lest I be accused of pimping for them. If I wanted a bullet,I had the connection to Radez bought them, hit my sheets next day. That is my story and am sticking to it.
I can assure you, Xoom offers them as I have grabbed one when I was with them. Extremely fast, marging efficient, and cheap.
FWIW, Xoom (previously Pointdirex) advertises all over EliteTrader.
Retail firms do have bullets. I know for a fact.
My question to you - when you put on long term married puts, are the options marked to market properly? That has always been a problem where I've been.
Most brokers don't properly margin married puts or other hedged positions.
The margin rules for such positions were changed a few years ago to give more favorable treatment because of their limited risk, but it seems that most brokers didn't bother changing their systems to accomodate it.
Even IB didn't use to margin hedged stock/option positions correctly, but I believe they do now.
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