Having an "edge", any edge, is PRICELESS for trading. Bullets clearly give you an edge over the general market. Declining prices are usually fiercer, and provide incredible money making opportunities, for too many reasons to go into now, not to mention in this market the overall trend is to the downside. So the cost of bullets (the most expensive I've heard of were 3 cents per share and a $10 ticket, although many firms charge as low as 1.5-2.0 cents per share and no ticket charge) is almost not an issue. Put in another way, what price are you willing to pay to have a PRICELESS advantage over the market?? I haven't traded a day in 3 years WITHOUT bullets. Good luck!!
There seems to be a common element that I see on this board. The posters talk about how bad something is. Yet they have no experience with it. "Bullets aren't any good" "Trading at a professional firm is crazy" "My father's Peak Performance course is of no use" I could go on and on. If you haven't ever used something and have no knowledge of it why are you giving an opinion of it?? The world has many things to offer but you have to experience them to understand them. Now on the topic of bullets Professionals aren't required to buy them to short. We can hit the short button too and wait for an uptick. As a professional trader I choose to use bullets. That should speak volumes. Or maybe the fact that all of the professional firms aren't allowed to post about bullets on their websites so that the general public doesn't have knowledge that exchange members don't have to wait for upticks. The SEC can't control what is on a message board though. Robert Tharp
Hehe, somewhat humorous. If you are at a prop firm, they are cheap and blazingly fast. All of these are "returned" at the end of the day. If you are not a prop firm, you can put on a married put position by hand by buying the underlying and at the same time buying a deep in the money put. I don't recommend this unless you are going to be trading the stock actively, in which case a conversion may be a better way to go. nitro
It does get to be a bit much at times, doesn't it. I haven't seen any personal attacks on your Dad's training, but for whatever it's worth, he has a good reputation in my book. We (prop traders) have many advantages over the general public, and we prove their value by making consistent trading profits, while at the same time providing liquidity and depth to the markets. Don't let it get to you!! (Hey, I'm still here, alive and well!!)
Is there any retail broker allowing conversions? I read bullets are only for pros and retail accounts don't have access to it but technically why wouldn't you be able to do this with 2 accounts? You would sell calls in one and buy puts exactly at the same time in the other to get short and then you can just start buying and selling the underlying stock.
If you want to short on a down tick there is a way of doing it if you trade only a few stocks. When I started trading it was at a firm called Block Trading and what they offered retail traders were cross guaranteed accounts what that is one account long the stock and another short. That is not allowed anymore for the margin requirement was 5%. But if you have the money and have two accounts you can do the same thing and just offset the loss or gain at tax season.
Well, I trade with Interactive Brokers and I have put on conversions "by hand." I don't recommend this unless you know exactly what you are doing. The prop firms get them "at once" and therefore there is no chance of on of the legs moving away from you too bad, thereby locking in a large(r) loss than necessary. As to bullets, what the heck is so "professional" about buying the underlying and buying a deep in the money put? Investors who are long stock buy puts all the time to protect their downside. Here, you need a deep put so that it's delta is (as close) to one as possible? nitro
Better jump in here. Several firms (mostly Texas outfits similar to Block) have been put out of business due to this practice of "cross guarantees"...anyone taking part in this better check the rules regarding "aggregate position" - this applies to retail customers and professionals alike. Since this is somewhat "self regulated" I worry about the practice going on to the detriment of traders. I don't want to get into a debate about this, just check the reg's and ask your firms if they check for overall aggregate stock positions. "Error on the side of caution" on this one.....
I not sure but I think it's just the margin requirement that is illegal. If you are willing to pay the margin on the short position and have two accounts how can it be illegal. The old margin requirement was 5% now in order to do this you need to pay for both positions.