Are there any daytraders in countrys with an FTT 0.5% or over?

People would find a way round it. We have a 0.5% FTT on UK shares. It's called stamp duty. So nobody day trades the underlying shares. They use derivatives - retail customers mainly use spread bets, and institutions CFD's. You'd expect the government to slap the FTT on derivatives as well. Interestingly they haven't gone down this route. Whether the US government would be as sensible, I couldn't say.

Interestingly when FTT was first posulated a few years ago in Europe we analysed the impact a small (say 0.01%) tax would have on our firm. We decided it would make us an extra 10bp a year. Because we were trading relatively slowly it had minimal impact on our bottom line. This was more than compensated for by the expected improvement we'd see in execution costs once all the HFT firms were smoked out of the market :-)

GAT


Hybr1d88 said:
Is it even possible to daytrade with the kind of FTT the robin hood tax nutjobs are proposing?

Is this 0.5% round trip or 1%(lmfao) roundtrip? If it is 1% it will literally(not fear mongering) tank the entire USA economy(see Sweden) and will undoubtedly be reversed the next month.

Now if it's 0.5% roundtrip it might stay around for a little while despite decreasing volumes. Although it seems much more likely that it will be in the range of 0.1-0.2(see France and Italy) or less. Also France doesn't tax intraday traders it's on net gained position on EOD so it's swing or long term traders that bite the bullet there.

So let's say the USA passes an FTT(highly unlikely as the republicans will have pretty solid control of the house until around 2024), but let's say they do somehow manage to pass it, and let's say institutions and banks aren't exempt so they will fight it. I say this because if they were exempt than the tax wouldn't make very much money, as there aren't many retail traders whom are profitable to begin with.(Let's say 85%-90% are profitable). I would say about half of all day traders literally stop trading the day of activation and another 1/4 go after that, leaving only 1/4 of there volume(the highly successful 500K-1M+ a year day traders.)

How much money could one still hope to make daytrading with an ftt, one that's in the realm of 0.02%-0.2%?

Would it be possible to be a profitable day trader with a 0.5% FTT?

Not that I could ever see the US implementing one so high it would be reduced the second the market and volume tanked(30%+, see Italy), the politicians would realize how retarded they are. For another example Italy ALREADY reduced there newly implemented FTT and France won't do it for intraday. My bet is Italy reduces it again soon or changes it with the same intraday exemption that France has.
Apparently there's plenty of successful day traders in Hongkong and they have an FTT of 0.1 on both the buyer and seller(round trip of 0.2%).

Thanks guys
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globalarbtrader said:
People would find a way round it. We have a 0.5% FTT on UK shares. It's called stamp duty. So nobody day trades the underlying shares. They use derivatives - retail customers mainly use spread bets, and institutions CFD's. You'd expect the government to slap the FTT on derivatives as well. Interestingly they haven't gone down this route. Whether the US government would be as sensible, I couldn't say.

Interestingly when FTT was first posulated a few years ago in Europe we analysed the impact a small (say 0.01%) tax would have on our firm. We decided it would make us an extra 10bp a year. Because we were trading relatively slowly it had minimal impact on our bottom line. This was more than compensated for by the expected improvement we'd see in execution costs once all the HFT firms were smoked out of the market :)

GAT
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Does your firm swing trade?

Or hold for years/long term?
 
Usually stupid crap gets legislated after market crashes. So wait until the next market crash (whenever that happens) and there will most definitely be a push by stupid people to push the robinhood tax. However, considering it couldn't get done after the last financial crisis, odds are that it will never get done.
 
vicirek said:
The concept of FTT is not based on logic or on economic fundamentals and since it is idiotic idea that violates core principle of free economy (free flow of capital) it has good chance of being implemented.
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Fortunately, the Fed relies on academic research to make decisions. We have not descended into mob rule, yet. surf
 
globalarbtrader said:
Ex-firm, I left 18 months ago.

Mostly trend following; average holding period around a month.
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So I take it even with an FTT you can still make money holding for a month, which is what I would consider swing trading. Like 2 weeks to 3 months or so.
 
I think there are different rates depending on what you trade. I read some time ago about it but cannot find it anymore. But I found this:

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So for futures it would be 0.02% and not 0.5%, which is a huge difference ( 25 times less).
Has anybody the rates that are proposed in the FTT? Because at this moment we discuss without having any idea what the impact will be as long as we don't have the exact rates.
HFT will be hurt the most I think.
 
Hybr1d88 said:
So I take it even with an FTT you can still make money holding for a month, which is what I would consider swing trading. Like 2 weeks to 3 months or so.
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Obviously it depends on the level of the tax, your average holding period and your leverage (which in turn will depend on your appetite for risk, as well as the kind of assets you are holding).

At 0.5% or 1%, clearly you have no chance. At 0.01%, which is the level we were looking at, it's possible for relatively slow traders to survive.
 
Mmm thats a nice juicey tax stream on paper, can you imagine how attractive it looks to progressives without a clue? Vast majority of it would not exist in practice, futures with 0.02 on each side hugeeee. Things are going well considering but never stop getting your word out there in response to the disinformation.
 
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