vinny you're right. hell i can open 10 pizza joints a month. anyone want to buy 6=30 inch apple monitors cheap?
Industry Fears Proposal in Congress Would Destroy High-Frequency Trading and Liquidit
- Thread starter stephencrowley
- Start date
The Porkulous Package was our death warrant.
The trading tax will be the injection.
The trading tax will be the injection.
That's not in the bill as it is currently written. This from the text:
(a) Imposition of Tax- There is hereby imposed a tax on each covered securities transaction an amount equal to the applicable percentage of the value of the security involved in such transaction.
(b) By Whom Paid- The tax imposed by this section shall be paid by the trading facility on which the transaction occurs.
The exchange pays the tax per transaction, and presumably passes the cost on to the trader
I recommend all traders actually read the bill:
http://www.govtrack.us/congress/billtext.xpd?bill=h111-1068
Excellent points there. I might have made some of them myself
They forgot the retail traders providing capital to expensive Forex platforms rather than to real companies and a rise in mutual funds expense ratios eating up any value added by these institutions (that elusive 1% alpha is less than the difference between the untaxed US and taxed UK funds total expense ratios). More importantly, they forgot to mention (and that is indeed true) that the tax is being introduced *twice* (not only by h111-1068 but also by h111-676 - of all places... great hedge, sir). The media is barking up the brightly lit but still wrong tree, while the true trader tax is being pushed by stealth elsewhere: in section 211 of the United States National Health Care Act, where we find the familiar words (little consolation that commodity futures seem to be excluded):
"(D) Instituting a small tax on stock and bond transactions."
I initially found it hard to believe... Surely that will turn into a political disaster for the 'good guy' image of the new administration - such underhand tactics... Obama The Prince?
Or perhaps The Mask of Sanity...?But that new pan-European market is a great idea indeed. Can't wait when Interactive Brokers starts offering US-style commissions for Europe! Unless Brussels counters with some sort of pan-European Obama tax (there were plans in Germany...) Those lower access costs (which are still high by NYSE standards) would be of little use if Chix traders had to pay the 0.5% 'stop loss tax' like in Britain here.
http://www.chi-x.com/cheaper.html
So many beautiful other markets out there.
Europe, Asia, Latin America. Maybe the US is interested in an USD sell off and repatriating "emerging markets" ?
If some sort of transaction tax is passed, it probably will not be a percentage, especially as large as the one proposed. That would create a huge drain on the budget with the loss of capital gains taxes, as people simply stopped trading. They would even lose a lot of the SEC fees they currently make off each sell transaction in the equities markets. Even politicians at some point must realize that for most people trading is not something they have to do and most of the professionals will leave the business or trade overseas. Then they would have to watch as London or even Canada became leaders in the securities markets. Once individuals saw these new incredible fees charged on trades... the democrats would be in big trouble during the next election cycle. For most politicians re-election is their most important concern.
If a transaction tax is passed what they will probably try and do is make it a much smaller percentage or a flat amount that comes out to say .25 total...per transaction. If they truely want to raise revenue they will try to have a tax that can be hidden, so that most traders do not notice it and significantly alter their trading behavior. At a cost of .25 per trade, a person doing 100 trades per day would pay $25 to the govt. While that is not a good thing, it would not drive profitable traders out of the market, but would raise a lot of revenue over time. The average person trading thru Ameritrade and doing 8 trades per month would not be too concerned with the extra $2 per month they paid.
I am not stating that this transaction tax idea is not a disaster, but usually bills like this are drastically watered down once the people with even the least bit of common sense get their hands on it. There are enough democrats who would love to get their hands on more revenue rather than completely destroy the securities markets and have to deal with those ramifications.
If a transaction tax is passed what they will probably try and do is make it a much smaller percentage or a flat amount that comes out to say .25 total...per transaction. If they truely want to raise revenue they will try to have a tax that can be hidden, so that most traders do not notice it and significantly alter their trading behavior. At a cost of .25 per trade, a person doing 100 trades per day would pay $25 to the govt. While that is not a good thing, it would not drive profitable traders out of the market, but would raise a lot of revenue over time. The average person trading thru Ameritrade and doing 8 trades per month would not be too concerned with the extra $2 per month they paid.
I am not stating that this transaction tax idea is not a disaster, but usually bills like this are drastically watered down once the people with even the least bit of common sense get their hands on it. There are enough democrats who would love to get their hands on more revenue rather than completely destroy the securities markets and have to deal with those ramifications.
people can present numbers but if you have certain ideas you will reject the numbers.
an active trader who is flat from the market and commissionswill lost 100 per cent of his capital within six to12 month with the suggested fees.
what is the difficulty in comprehending these numbers?
again: $100,000 in account. you trade 1m per day which is not unusual. at .001 your cost is $500 or $1000 day. you are broke within six to 12 months. this is not a forum for 8 transactions per month
1st peopled ridiculed the whole idea of a transaction tax. now they are talking about a "watered" down tax whose implications they are clueless about.. this is exactly how politicians sucker the public over and over again.
an active trader who is flat from the market and commissionswill lost 100 per cent of his capital within six to12 month with the suggested fees.
what is the difficulty in comprehending these numbers?
again: $100,000 in account. you trade 1m per day which is not unusual. at .001 your cost is $500 or $1000 day. you are broke within six to 12 months. this is not a forum for 8 transactions per month
1st peopled ridiculed the whole idea of a transaction tax. now they are talking about a "watered" down tax whose implications they are clueless about.. this is exactly how politicians sucker the public over and over again.