If either RTharp or Don can answer this:"say one person at your firm sells short the regular way on an uptick 1000 shares of ABC stock,and someone else goes long 300 shares of the same stock;can the one who is long sell his 300 shares on a downtick or must he sell it on an uptick since the firm is net short 700 shares? And are these 2 trading accounts considered separate accounts unlike proprietary accounts where everyone is basically trading one(the firm's)acount?
Vinny we are seperate accounts at a professional firm. I can't hedge with another trader Buying power isn't reduced by using a bullet/conversion as firm understand that is a riskless position Robert
Don, I think your site says conversions are free? Bullets? rtharp, are conversions free at Echo? I think I heard bullets were .025/sh. If I have 25 stocks that I want to set up conversions, following them for the entire month, and it does not tie up buying power, wouldn't it be cheaper to just set these conversions up at the beginning of the month, instead of having to do bullets on them every day?
Don, You said: "Conversions are kept until expiration" Are you talking about conversion arbitrage ? Why would you keep the conversion until expiration otherwise? And how frequent are arbitrage opportunities considering all costs?Thanks
Traders who want long stock for the stocks they trade buy conversions at or near fair value and keep them until expiration, then roll over to the next expiration. This is much cheaper than buying bullets every day. Bullets are used when you are only trading a stock sporadically.
Nasdaq stocks always have that because there is not a central order book. In the 'dealer' market, the stock trades at various prices simultaneously, so it's very very easy and common to have upticks all the time, even during a good selloff.
rigel this is a late reply because I was not going into this but --in no way did I say you had to have an uptick to short the spys or the qqqs. I said imagine having to wait for an uptick. ie imagine having to wait for uptick in the qqq or the spys so you could short. It would not seem right. Well if you trade new york stocks in and out all day long, you learn when they are about to roll over certain things happen. Sometimes a nice enticing bid will be there but a hundred shares will go off on the offer preventing shorts. Many things can happen in a downtrending NYSE stock that prevent good shorting opportunities. However, bullets give you back that opportunity. If you do not realize this you do not trade listed stocks for short term (minutes) profits. Rigel to respond to whether I know what I am talking about let me respond like this. I have traded millions of shares on the NYSE over the last five years or more, and I make a living doing it. I know. Just look at TYC the last week or so. Bullets were worth thousands of dollars to the traders in the office. I trust no anti bullet person will argue with that. If this response has a harsh tone I apologize I was just in a hurry.
About $250 for 10,000 shares (2.5 cents). I figure if you can make a nickel by using a bullet, then you paid for it plus any commisiions and still make a profit.