Anyone Here Been Trading 20+ Years?

[ktm]

Hope so KTM. I'm not saying Wall Street is completely devoid of blame or couldn't do with some changes. It could.
But the talk coming out of politicians mouths would destroy the industry. Not only for genuine day traders. But also the hundreds of millions in tax revenue it brings in.

Most of Dodd Frank still hasn't been implemented.

They also rave on about the "Wall St fat cats" and carried interest. That sounds awesome to the crowds that gather and cheer on the candidates, but every candidate knows they will never change the rule.

1. Even if everyone just paid it, the revenue would be equivalent to a few DAYS of interest on either the Civil Service Trust Fund or the Fed's fixed income holdings. It's nothing.

2. Most would not pay it as they would simply re-domicile elsewhere.

 

[ktm]

I just read:

His father pleaded guilty to fraud in 2001 and spent five years in prison for scamming $10 million out of family and friends in a Ponzi scheme.

Business as usual.

Wow. He steals (net) 10M and serves 5 years at Fed camp. Apparently he's a former congressman also.

As bad as I often think politicians are, they're usually worse.

 

[tommo]

Most of Dodd Frank still hasn't been implemented.

They also rave on about the "Wall St fat cats" and carried interest. That sounds awesome to the crowds that gather and cheer on the candidates, but every candidate knows they will never change the rule.

1. Even if everyone just paid it, the revenue would be equivalent to a few DAYS of interest on either the Civil Service Trust Fund or the Fed's fixed income holdings. It's nothing.

2. Most would not pay it as they would simply re-domicile elsewhere.

All true. Take the idea of Financial Transaction Tax for example.

It would raise everyone's trading costs 200%-400%. Imagine what the depth of market would be like with no short term traders. A 100 lot would move the ES 10 ticks. Volatility would be through the roof.

Fair enough it would kill of HFT's but would also kill off all the million and millions of dollars generated in tax revenue the financial markets generate.

Then add in the fact end users won't be able to hedge as efficiently and will pass those costs on to Main Street. Your 1% a year management fee on your mutual fund will now be 4%.

I know it won't happen. But democracy is scary sometimes when complete idiots are allowed to suggest and vote for lunacy.

 

[ktm]

...and lots of people (including traders) often forget the entire purpose of derivatives in the first place - farmers.

The entire point was to get the farmer a fixed price for his crop later in the year so he has some stability in his life. Any attempt at negative change and you'll see those guys wearing overalls on your TV telling middle America why food made from corn and wheat will cost triple next year.

Bring out the elderly for those 4% mgmt fee commercials and show a few of them eating cat food and pulling on their blue hair in front of a pile of unpaid bills. Find a way to work the children into the mix too. Lobbiests just sit around thinking of this crap all day. I know, I have lunch with some of them from time to time.

 

[tommo]

...and lots of people (including traders) often forget the entire purpose of derivatives in the first place - farmers.

The entire point was to get the farmer a fixed price for his crop later in the year so he has some stability in his life. Any attempt at negative change and you'll see those guys wearing overalls on your TV telling middle America why food made from corn and wheat will cost triple next year.

Bring out the elderly for those 4% mgmt fee commercials and show a few of them eating cat food and pulling on their blue hair in front of a pile of unpaid bills. Find a way to work the children into the mix too. Lobbiests just sit around thinking of this crap all day. I know, I have lunch with some of them from time to time.

Well said!

I think more needs to be done to bring the balance of markets more in line with the end user in mind (and I say that as a day trader with no interest in the end user). But we need to make sure the markets serve a valuable purpose to keep people onside.

But all these convoluted taxes and regulations make a mess of the whole situation.

It can be far more simple. Just increase margin requirements and capital reserves of people trading (which has already started), if you can't afford $500 or whatever it is for intraday margin per 1 lot you have no business trading. Bring the OTC market on exchange and if possible, have a max speed on trading connections so you don't get people with significant speed advantage (even though this has no impact on 99% of traders) and you have pretty much solved everyone's concerns.

At least you get to speak to lobbyists from time to time it gives you some feeling or influence if you can plant a seed of logic in their minds.

 

[i am nobody]

...and lots of people (including traders) often forget the entire purpose of derivatives in the first place - farmers.

Are futures also not important for hedging fund portfolio's? Much easier than hedge every individual stock on each move or work with options.

 

[tommo]

Are futures also not important for hedging fund portfolio's? Much easier than hedge every individual stock on each move or work with options.

Yes and your retirement funds/ mutual funds. Far easier for them to protect downside exposure through S&P derivatives than unloading every stock individually

 

[777]

I barely qualify on the 20 years requirement. The one thing I can say is that unless you are trading a very liquid security, the spreads today are much larger and the amount of shares you have access to at any instant of time are much lower. It is like night and day from then compared to now. I find the notion that HFTs make spreads tighter and increase liquidity absolutely ridiculous. I've adapted over the years but it always makes me chuckle when people defend HFTs as some super awesome replacement for what existed before.

There were more inefficiencies and inefficiencies lasted longer.