I was wondering if some folks here would discuss the cost of using bullets and how you use them? How long does it take to create a bullet? For example if you watching stock XYZ and it is setting up for a fall can you get a bullet filled in 1 minute (maybe less)? How much does it cost? Do you create bullets before the open and sell short on the opening print? Any thoughts? Leland
Bullets are an absolute necessity if you short stocks. I could not imagine life without them. I use them on 4 to 5 different stocks a day. You use them to short downticks, that simple. With a bullet you can hit Sell instead of Short, which is good on Nasdaq stocks but absolutely essential on NYSE stocks. All pro firms will have them, but when you call the firms, ask if they are electronic or if you have to call them in. You only want to go with a firm that has electronic bullets. You can enter the amount of shares you want on your screen and get filled in less than a second. It's instantaneous. So if you see something, you click the bullet then hit the bid. Ask anyone at a pro firm if they use them, everyone I know does. I looked around, Echo is the cheapest. I pay 3 cents per share to get the bullet on, then you just pay normal rates to trade after that. So if you want to scalp 100 AOL all day, in the morning it will cost you $3.00 one-time when you buy the bullet, then you can sell it short on downticks all day, and every time you do you only pay the normal 1 cent per share rate. Yes, you can get them before the opening and sell short the opening print. You have to try them once and you will be hooked. Anyone who says you don't need them has never tried them. -Jim
So the bullet is good for the entire trading day but I would have to create a new bullet for the next trading day correct?
I'm seriously considering jumping to Echo just for the bullets. In fact, I'm filling out their questionnaire right now. I'm tired of seeing stocks break down $.25 to $.50 without an uptick in sight. And hopefully, with full SuperSoes on Monday, I won't have to short to that distant ECN; I can just whack the slow MMs. Hold Brothers says that I (not a pro) can use bullets, too, but they call them hedges and they cost a lot more than 3 cents/share. I also have to call to get them (slow) and I have to hold the hedge for a month (eating into my buying power). Sounds really useless to me. TraderJimR, Isn't a bullet a combo of a long position and a short call (or a long put; I'm not sure - it was defined on these boards somewhere), so that when you 'short', you're selling your long? If so, how do you sell it again if you don't have the long? Oh, wait! I just thought of the answer as I was typing: You cover the short to get neutral, and then you can short again. Is this correct? Geez, I can't wait to get licensed!
Leland, Yes. A bullet is a one day thing. If you want to do the same stock everyday you can get a conversion, sounds like what Klaorman says Hold Brothers calls hedges. Sounds like Hold doesn't even offer true bullets. Klaorman, That is correct, once you cover the bullet you can sell it again instantly. If you are already short 2000 and have 2000 bullets, and want to bang another 2000 on the bid, you just click another 2000 bullets and half a second later you are banging more out on the bid. Then when you cover you have 4000 to use for the rest of the day. You all should go into an office of any firm that has electronic bullets and see this sometime if you don't have them, you will be hooked. -Jim
TraderJimR, Actually, HB does have bullets; they call them day hedges, but they say you need $1 million in your account plus guaranteed income of $250K/year to use them. That's ridiculous! I might be mistaken, but that's what they told me on the phone.
Klaorman, Wow, that is totally ridiculous! 1 Million bucks! Whatever! There's another post where a guy says this: "Hold Brothers just instituted a policy whereby all traders have to open up their trade blotters, copy their day's trades into a form, fill out the rest of that form stating that they confirm that the trades stated are the trades that they made and fax or email it to HB. They have to do this everyday! What a pain! Is HB doing this because their backend software is buggy and they're trying to cover themselves in case there's an error? Does any other firm require this silly bookkeeping?" You know, I hear these things and I just have to ask - Why does anyone trade at a firm like that? I do know that you can use electronic bullets at Echo with a $10K account. Saves you $990,000. Pocket change for those Hold guys apparently. -Jim
TraderJimR, -I'm- the guy who said that! And I'm trading with them...for now, but as I've said, I've initiated the process of joining Echo. I just remembered something else that ticked me off a bit about Hold: I'm mostly using their software's hotkeys to place orders, but I've talked to one of their top traders and he said that he uses a SelectNet Preference box most of the time and that most of the other traders do that too. I suggested to Hold that maybe they should write a "Tips and Tricks" booklet or article that tells how to best use their software because their manual is similar to a reference guide, describing all of the functions but never giving any tips. They responded by saying that they can't teach me to trade; they can only describe the tools and I'd have to figure out the best way to use them myself. Well, just throw me into a gunfight using a water gun, why don't you?! Someone here, maybe you, said that Echo will do their best to help you learn the tricks of their software. True? You also said that they'll help you to configure your system. Sounds like great service there!
Klaor, They helped me a lot. They can Netmeeting into your computer and do all the set-up and updates for you if you are having problems, they are pretty cool. I know with me, when I first started one of the Echo principals was on the phone with me for a couple hours walking me through how to do everything. They are very reponsive if you call them for anything, good customer service. -Jim