What will be the end result of the elimation of bullets be on pro firms/traders?

Discussion in 'Prop Firms' started by gimp570, Nov 20, 2003.

  1. gimp570


    Is Day trading finally done? This has to be a huge blow to day trading firms. Will this be the end of them or will they be able to adapt and survive? I know traders were really struggling lately, this certainly does not help.
  2. The end of Bullets is certainly a HUGE blow to the arsenal of a daytrader at a Prop Firm.

    Stock volatility has been especially DEAD over the past 8 months anyway . . . Time for a lot of stock traders to learn how to trade the Bonds and E-Minis.

    Just my 2 cents.

  3. The concept of bullets was such a loophole.....did traders really get so used to them?
  4. gimp570


    I agree that bullets were a shady concept to begin with. There is an uptick rule......and here is how to get around it.....I guess we should be happy for how long they lasted. But I sure do miss them.
  5. UH, let's see just how much the waters have dropped, and when the tide is out, the harbor stinks.....

    PDT Ruling allowing 4:1 margin for the average, non-licensed individual caused:
    a) potential traders with capital to look aside from prop shops
    b) improved the buying power and closed some of the gap between the props and the retail public
    c) began to limit the value of going proprietary in the first place

    Married Puts being Outlawed (Bullets)
    a) specialty software and trading styles that hammer the stocks down are pretty much left without much wind
    b) excessive volitility through artificial (non economically beneficial activity) trades participation is abated

    What's next? some new NASD Series license?

    Ooops, wasn't that what the series 55 was all about?

  6. This is such a minor thing, and we have all (yes, even our "competitors") made alternative plans....our traders are fine.

    I'll admit that we were expecting January, not November, but hey, what the heck.

    As I said in another post..."not even a reason to "spin" this this whole thing"...it's just no big deal.

    It will certainly be a sad day if and when the end of trading really comes...but we'll all be dead and buried by then....and the "smart people" will have already adapted....much like we have done with the bullets.

    Don :cool:
  7. jem


    why do some people want to see the end of prop shops. Even if there were absolutely no advantage to being part of one some poeple might still show up at the office. I trade from home now. There are definite advantages and disadvantages to being at home vs the office. Whiney traders vs. whiney kids just to think of one of the areas to weigh.

    Also I thought bullets were much less of an advantage since decimals any way--- but they were still an advantage over retail on the midcap to lower cap Nyse when the specialist didn't fell like screwing you.
  8. I think it is a blessing to the bottom line for most traders ( less commish )..... unless of course they are used wisely ( as in only when needed )....if not it just takes away from your winnings....
  9. They weren't a shady concept because there is no harm done in shorting, even on a down tick. Daytraders don't determine the direction of the stock, fundamentals, institutions and the specialist do (the specialst only temporarily). And shorting helps to keep a check on endless buying, while without much shorting the market becomes more like a pyramid scheme. And if the stock goes down a quarter because someone hit the bid, then it didn't have serious or real buyers and wasn't supposed to be that high in the first place. That is why they will allow selling in the thickest stocks now on a down tick even without bullets. Ultimately, the market is not Las Vegas. Stocks are a value placed on the fundamentals and growth of companies, and the stock price will ultimately come to its proper value!
  10. The "excessive volatility" (which we sure haven't seen much of lately, now have we) is beneficial if daytraders do actually cause such a thing, because the daytraders as a whole add serious liquidity to stocks, allowing average investors more easily to get into and out of stocks, and to do so with LESS volatility since lower volume itself leads to more volatility.

    As far as "specialty software" to "hammer the stocks down," what kind of absurd statement is this. If you daytrade, you should know that daytraders don't have that much power over stocks. A stock with real buyers, with real institutional strength (or even with enough regular buyers) will not go down cause some asshole hits the bid. If it goes down a quarter or so because someone hit the bid, then it was rising on a house of cards and wasn't meant to be that high in the first place, which is thus the reason for its decline, not someone with this nonexistent specialty software (there is no specialty software for selling a stock).
    #10     Nov 20, 2003