I don't understand all the doomsday talk because of no more bullets. I have been daytrading for 3 yrs successfully and have used bullets maybe twice. Are there really that many traders who don't know how to work a short into a up move into resistance? DTP
they are a MAJOR source of revenue for retail prop shops disguised as professional trading rooms. surfer
Well first the trading firm made a lot of money from them, which helped offset the squeeze from commission rates and ecn rates dropping (the line of straight passthru ECN fees was a BS line used by many firms for a long time). So this might take down the shaky firm in the business. There are many reasons for traders upset about the ending of bullets and conversions. I know traders who have been using them for 4 or 5 years so it will totally change the way they trade which can be quite upsetting. This was especially true with the large down moves that occured for almost 2 years. Also when news comes out on a stock it will be almost impossible to get any shares that you could get if you had bullets. That can be the difference in making 2 pts on a move or making nothing. Also some traders chose to scalp trading 200-800K+ shares a day where bullets were almost necessary. So just because you never used them and got used to shorting against the momentum doesn't mean that everyone trades or wants to trade the same way you want to. If you woke up one day and found out a huge tool in your trading was just taken away you would probably be upset too. Yes you could or would possibly adapt but it would still probably make you mad and a little bit nervous.
Well IMO, there were a lot of traders that were somewhat dependent on software to scan for very specific level II type situations (specialist action, open book crossdowns, etc.) where bullets were EXTREMELY effective. A lot of these guys traded size and traded a lot of volume compared with most of us...I mean a several hundred thousand shares a day in a lot of cases. For them bullets were very critical because often they were looking for 2-5 cent moves and getting short at the bid was critical. The bid minus 2 cents might be the difference between a profitable trade and a loser. Traders that go for bigger moves or trade more off of charts, technicals, etc. I don't think really appreciated how effective bullets were for very short-term setups where you could not anticipate the setup in advance. A lot of those guys seem to be adapting somewhat by trading less stocks and increasing their holding periods sometimes holding for as long as a full minute, LOL. you know what I'm saying. It is definitely hurting some traders a hell of a lot more than others as evidenced by your post. Has cost most of my friends a good deal of money already though. I am curious as to your time horizon for most of your trades and what you are usually trying to get profitwise....i.e are you looking for more than 5-10 cents on most trades?
ditto that. I was typing a similar post as you were typing yours. I however forgot to add the part about stocks affected by news. There are certain traders that specialize in this stuff who make a good deal of money shorting stocks with bad intraday news, getting short an NYSE stock that is tanking off a DJ newsheadline is now quite dangerous if your giving the specailist a market order waiting for an uptick you'll get fried many times of that fill trying to get short.
I wasn't knocking anyones style of trading. I guess I was more curious about methods of trading that relied heavily on bullets. My personal style of trading is to hold a trade for about 5 - 15 minutes, so I obviously never needed them. Thanks for the responses. DTP
some people need to be able to short on the way down, not on the way up, simple as that... your trading style lets u short on way up, whooptiedoo. I find bullets crucial for shorting NYSE stocks, not so much for Nasdaq.
Oh I forgot trading econ numbers that turned out bad. Having bullets and a good news service you good get in on the first reaction of the announcement. Say you have consumer confidence number expected at 85 and it comes in at 77. You could hit that for a fast 2- 5K shares and get a quick 30-50 cent move within a minute. Now you hit 4 or 5 numbers a month like that and you turn an ok month into a pretty good month. There is also the difficulties of trading thinner nyse stocks where the specialist seems to have a lot of power in making sure an uptick never occurs when he does not want it. What is funny is that MM can short on downticks but how much real liquidity are they providing these days instead of just filling orders. I knew traders that scalped some bigcap nasdaq stocks like brcm, qcom who would trade up to a million or more shares a day on a stock trading 12 million shares a day. They could not do that without bullets yet they were providing much more liquidity then many of the MM were. By the way I am just throwing out reason why traders would be upset about bullets being taken away. I did not want it to seem like I was attacking you. I saw the writing on the wall for Me awhile ago and moved onto products without all the complications for trading that stocks have.