This part of the tax is just political. There are no HFT trading firms in France except the usual (bank ) suspects which are exempted of this tax as MMs. They are not expecting any revenue from this. They just want to "stop this behaviour", which in reality will only favour firms outside of France to grab part of the profits of french firms unable to compete...
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1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
I was searching for info on the effect the French FTT has had on volumes. Did not find anything, but came across this which provides details of the whole scheme.
http://www.eurexclearing.com/download/documents/publications/French_Fin_Transaction_Tax.pdf
http://www.eurexclearing.com/download/documents/publications/French_Fin_Transaction_Tax.pdf
Recent Cato Institute research paper.
Would a Financial Transaction Tax Affect Financial Market Activity?
Insights from Futures Markets
http://heartland.org/sites/default/files/cato_transaction_tax.pdf
Would a Financial Transaction Tax Affect Financial Market Activity?
Insights from Futures Markets
http://heartland.org/sites/default/files/cato_transaction_tax.pdf
Quote from justrading:
I was searching for info on the effect the French FTT has had on volumes. Did not find anything, but came across this which provides details of the whole scheme.
http://www.eurexclearing.com/download/documents/publications/French_Fin_Transaction_Tax.pdf
What happens in France after introduction of their FTT version is important. It will affect others considering a form of FTT.
Didn't Cramer say early today on CNBC that France has been the best market gainer recently? Of course, it's other market dynamics in place, too, but FTT proponents will cite that to buttress their case. Whether their FTT has more political brand than bite will be lost on many.
In the end, the big question is, can a market survive by taxing small market makers/traders out of business with FTT? What do you think?
Quote from Robert A. Green:
What happens in France after introduction of their FTT version is important. It will affect others considering a form of FTT.
Didn't Cramer say early today on CNBC that France has been the best market gainer recently? Of course, it's other market dynamics in place, too, but FTT proponents will cite that to buttress their case. Whether their FTT has more political brand than bite will be lost on many.
In the end, the big question is, can a market survive by taxing small market makers/traders out of business with FTT? What do you think?
Most people don't know the difference between correlation and causality and could easily be convinced, if shown the data, that killing turkeys causes winter .
Perhaps a better (simpler) measurement tool is the French Finance Ministry's forecast that the French FTT will generate 1.1 billion Euros per year, or about 90 million euros per month. Data should be available soon (if the governnment doesn't bury it).
Quote from tomdavis:
Most people don't know the difference between correlation and causality and could easily be convinced, if shown the data, that killing turkeys causes winter .
Perhaps a better (simpler) measurement tool is the French Finance Ministry's forecast that the French FTT will generate 1.1 billion Euros per year, or about 90 million euros per month. Data should be available soon (if the governnment doesn't bury it).
Reference for my previous post that the French FTT is projected to generate $1.1 billion euros per year:
http://www.shearman.com/The-French-Financial-Transaction-Tax--A-Sign-of-Things-to-Come-03-20-2012/
http://www.sifma.org/blastemails/global_weekly_update/gfma/gfma-weekly021012.html
Quote from Robert A. Green:
In the end, the big question is, can a market survive by taxing small market makers/traders out of business with FTT? What do you think?
Yes. It can survive:
1/ it is easier to manipulate prices
2/ big players can generate more money from asset management showing better performance using the above.
3/ cost of market manipulation goes down with less volume and fewer independent players
Quote from Robert A. Green:
In the end, the big question is, can a market survive by taxing small market makers/traders out of business with FTT? What do you think?
I am inclined to think that the markets will indeed survive. HFT will take a big hit, so volumes will likely dip. As for small traders, much depends on their ability / willingness to adapt.
If higher rates of FTT are applied to stocks for instance, one could switch to derivatives where lower rates are being mentioned. Alternatively, spot forex may not see the FTT imposed, plus there are always overseas markets.
Even within markets, changes may be necessary in order to adapt. Bond Futures are not as volatile as CL, so if I wanted to recoup the FTT intraday, I would look to CL where there is a much better chance of the movement necessary to cover the FTT and yield a profit.
The Swedish experience is a distant memory for some, couple that with the usual this time it is different and we are where we are today. If the French FTT proves a colossal flop and fails to live up to the hype, that would be a reality check.
Quote from justrading:
I am inclined to think that the markets will indeed survive. HFT will take a big hit, so volumes will likely dip. As for small traders, much depends on their ability / willingness to adapt.
There will be very few "small trader" survivors. I don't know anyone who could overcome a $42 per round-trip transaction tax (more than twelve times the fees and commissions I currently pay) on ES futures and similar FTT on other futures markets. It will be the end for 99% of us.
Rather than adapting to the FTT, let's defeat it.
Learn more at: http://financialtransactiontaxes.com/