1/4% Tax on all stock trades pushed in NY Times today

This article gives examples from 1986. How can we compare 1986 to 2012? In 1986 the intraday trading would cease in Sweden because it was 1986 and because it was Sweden which from the beginning did not have high volume of trading. Even todays NASDAQ volume is more than 10 times higher than it was in 1986.

I do not think the intraday trading would cease today in the US at the same given circumstances but definitely it would go down. The question is why would we need such a high volume of intraday trading? Look at the MSFT today. It is trading 36,504,982 shares as of right now and falling like 2%. If it were trading only tenth of its Volume it would be falling may be 4% or 5%... it would give much more opportunities to make money…
 
Quote from JohnTrader:

This article gives examples from 1986. How can we compare 1986 to 2012? In 1986 the intraday trading would cease in Sweden because it was 1986 and because it was Sweden which from the beginning did not have high volume of trading. Even todays NASDAQ volume is more than 10 times higher than it was in 1986.

I do not think the intraday trading would cease today in the US at the same given circumstances but definitely it would go down. The question is why would we need such a high volume of intraday trading? Look at the MSFT today. It is trading 36,504,982 shares as of right now and falling like 2%. If it were trading only tenth of its Volume it would be falling may be 4% or 5%... it would give much more opportunities to make money…
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You think you are going to make 3 percent to surpass the cumulative tax on every trade? And several times per day?
 
If it is 3% it is insane. It is to paralyze the entire industry. I do not think any sober regulator may propose such thing.

For an individual investor the smallest possible tax would be the best, just to get rid of the High Frequency bots so market can move wider.
 
An Anglican Archbishop says something intelligent about the FTT!

(FT) Desmond Tutu, Bettina Gronblom--Holy Week calls for Reflection on Earning Money and Faith

Does this mean we should not enjoy all the earthly riches and goods? No. Enjoy them. Earn them. It is a misconception that one has to be poor to be spiritual, and that hard work should not be rewarded. What is important is finding the balance between greed and having enough, and defining what a joyful life means to us....

So how are we to correct the negative traits of capitalism? A Robin Hood tax, or Tobin tax, has been suggested. Yet there is a risk that such a tax is more likely to hit investors than banks. And it is not yet clear how it would discourage risky behaviour by banks.

We cannot tax ourselves out of this and hope that this will solve the problem because we are not addressing the root cause of the behaviour. We are in self-denial because we are treating the symptoms, not healing the patient.

Read it all

http://www.ft.com/intl/cms/s/0/7a457082-7cb1-11e1-8a27-00144feab49a.html (you need to be an FT subscriber)
 
Quote from JohnTrader:

If it is 3% it is insane. It is to paralyze the entire industry. I do not think any sober regulator may propose such thing.

"yes u are wrong. not only liquidity from hft traders will disappear but liquidity provided by short term traders will disappear.
take the following example. u have $25,000in capital. you trade $100,000 in and $100,000 out in a day. at .002 your expenses are $200/day. after 125 days of trading your capital would be wiped out if you broke even from the market. most non hft traders are currently losers without the ftt."

from fight the future-
04-04-12 02:23 PM

Quote from JohnTrader:

If we look from the other prospective, this Tax would actually help the ordinary trader to make profits in the market. It will get out High Frequency Traders from the game and cause more instability.

Taxing 0.1% each side would cost 0.2% to close a position, but on the other hand, increased volatility in the market will bring much more opportunities to profit more than 0.2%.

Or I am wrong?


Intraday trading would cease. Sweden: Tax rate on bonds varied with maturity, ranging from only 0.03% to 0.001%. In just the first week alone, trading of bonds fell 85 percent, bond futures dropped 98 percent, bond options stopped trading entirely.


That 0.1% tax is multiples more. It is a cascading tax. Every firm in the chain would be taxed. Traders would pay the cumulative tax.
See page 8.
http://www.parliament.uk/documents/...tenevidence.pdf



Even for long-term investors, the tax on a twenty year investment will cost 50% more than the original investment!

Consider a twenty year, €10,000 investment:

Annual Cost of an FTT for Equity European Active would be 252 Basis Points.

"...individual would lose nearly €15,000 investing in a more dynamically managed European equity fund over this timeframe. This is 50% more than what he/she originally invested."

see page 49
http://www.parliament.uk/documents/...tenevidence.pdf

there are many people like you who get an idea in their head and then refuse to look at the numbers which disagree with their view of the world.
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