Kamala wants a 0.2% transaction tax

Even if I don't support this tax, I can see that with a critical eye.

That would mean more investment and less speculation. More holding and less scalping. HFT would be dead, and day traders as well. It would be different, but there will be tons of opportunities as well.

And after all, how many day traders are full-time traders? The impact would be 0.001% of the US population.
 
It’s not 6 points - $300 on ES

it is more like $3 or so per contract
So if that is correct (Approx $3 per contract)

so yes it will screw with scalpers who try to scalp 1 to 2 points

but for people playing intraday swings of 8 to 20+ points = no effect

swing traders = no effect

long term trades = no effect

wiesman02 said:
It would put all of us out of business. Derivative trading (futures) would be 99.9% dead. Each ES trade would set you in the hole 6 points or more from that start (someone else can do the exact math). Impossible to overcome this.
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lvca said:
Even if I don't support this tax, I can see that with a critical eye.

That would mean more investment and less speculation. More holding and less scalping. HFT would be dead, and day traders as well. It would be different, but there will be tons of opportunities as well.

And after all, how many day traders are full-time traders? The impact would be 0.001% of the US population.
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Unless you are starting with a couple of million in capital “investing” is pretty meaningless. See how far you get making your 5-10% a year with 10-20k capital. If you want to make any sort of living from the markets you have to be trading short term.

Also as for HFTs they contribute billions in taxes for the economy. There is actually very good money to make off them. I’ve been a professional day trader for 13 years and they actually provide a trading edge. But for arguments sake if all the HFTs leave the market and it becomes this completely transparent order book it means nothing as day trading will be taxed to death anyway
 
Most "edges" that exist, btwn asset classes, indexes, or in sectors, only exist for a short period of time,... rarely for longer than very next trading day.

The more leftist Dems (Sanders, Warren, AOC) want to punish ST trading....seeing it as pulling money from thin air, at the expense of long term investors. (Flawed thinking...in reality ST trading increases liquidity and enhances mkt efficiency).

An implicit goal of a FTT is to penalize short term trading and to force the move to become an investor....where the perceived playing field is more level for everyone.

Dem mantra..."punish success and reward failure".
 
lvca said:
Even if I don't support this tax, I can see that with a critical eye.

That would mean more investment and less speculation. More holding and less scalping. HFT would be dead, and day traders as well. It would be different, but there will be tons of opportunities as well.

And after all, how many day traders are full-time traders? The impact would be 0.001% of the US population.
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0.001% of 330 million people is 3,300. I think that there are more day traders than that.
Also remember the indirect effect on employees of stock exchanges, broker houses, investment banks, etc. that will be affected.
 
lvca said:
Even if I don't support this tax, I can see that with a critical eye.

That would mean more investment and less speculation. More holding and less scalping. HFT would be dead, and day traders as well. It would be different, but there will be tons of opportunities as well.

And after all, how many day traders are full-time traders? The impact would be 0.001% of the US population.
More...

Thanks for the perspective!

I was thinking about this a lot, and how it could be good for society. I started thinking about housing, and basically came to the conclusion, is buying a house good as an investment?

(at least if youre under 50 I feel we have grown up not to not see it any other way IMHO) but is/should owing a house be an investment? vs just someplace to live.

What makes it an investment vs someplace to live? is it speculation? obviously that speculation increases the value but it also adds liquidity, if there were less people willing to speculate and make a profit/risk losing their investment in the housing market would that be a net good or a net negative?

If that "small percentage" of traders are taken out of the market, let alone the vast liquidity that the HFTs are providing, and bigger players also have to calculate for the cost of the tax in already getting in and out of shares, (let alone shorting) will that be good for investors?

The premise appears to be that speculation = bad, but first can someone explain to me how = bad, before we come to the conclusion at least?

So in theory at least, you say it will be good for investors, but if demand decreases will investors still expect the same increase in value? Will companies still be able to raise funds as easily by going public?

Can you explain, how this would be good? Would love any actual data if any is available. IMHO economics theory and reality usually prove to be vastly different, but am interested to learn other perspectives.

thanks
 
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Q. WHEN will a FTT be on WS's radar?
Or...when will the mkt start to discount a FTT?

HFT stocks such as VIRT and CME do not reflect concern...yet.
 
Stockboy said:
Thanks for the perspective!

I was thinking about this a lot, and how it could be good for society. I started thinking about housing, and basically came to the conclusion, is buying a house good as an investment?

(at least if youre under 50 I feel we have been programmed to not see it any other way IMHO) but is/should owing a house be an investment? vs just someplace to live.

What makes it an investment vs someplace to live? is it speculation? obviously that speculation increases the value but it also adds liquidity, if there were less people willing to speculate and make a profit/risk losing their investment in the housing market would that be a net good or a net negative?

If that "small percentage" of traders are taken out of the market, let alone the vast liquidity that the HFTs are providing, and bigger players also have to calculate for the cost of the tax in already getting in and out of shares, (let alone shorting) will that be good for investors?

The premise appears to be that speculation = bad, but first can someone explain to me how = bad, before we come to the conclusion at least?

So in theory at least, you say it will be good for investors, but if demand decreases will investors still expect the same increase in value? Will companies still be able to raise funds as easily by going public?

Can you explain, how this would be good? Would love any actual data if any is available. IMHO economics theory and reality usually prove to be vastly different, but am interested to learn other perspectives.

thanks
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It wouldn’t just effect a “small percentage of traders though”.

The majority of the volume traded every day is short term trading. You take that away and all the brokerages go bust. Exchanges go bust (these organisations pay billions in taxes and employ tens of thousands of people). You then have the commodity and insurance and mortgage companies that need to hedge exposure in the market which will have zero liquidity so their costs go up massively and hit profits.

You get the point...
 
Eafetrader said:
Q. WHEN will a FTT be on WS's radar?
Or...when will the mkt start to discount a FTT?

HFT stocks such as VIRT and CME do not reflect concern...yet.
More...

FTT needs to get 60 votes in the senate to pass. Even if Dems manage to squeeze out a majority, they’re still not gonna have enough to pass it. It’s still a threat that has minimal chance at passing
 
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