Transaction tax: an open letter to Don Bright

[gkishot]

Quote from Don Bright:

I've commented several times in the past about this, and nothing has changed from my viewpoint.

If something this Draconian were to pass, it would almost have to exempt the "liquidity providers" - even in this age of uber-regulation and possible taxes, this type of thing would be outrageous if MM's, BD's etc were affected to this degree. Sure, some possible (more minor) impact might take place, but something as propsed now would be ridiculous.

As I hear things from GS, I'll pass along what I can.

All the best,

Don

Any market participant is a "liquidity provider" to some degree. On the other hand if volume will fall sharply whom the "liquidity providers" are going to provide the liquidity to?

 

[OldTrader]

Quote from Anaconda:

You can't be serious. You're really not trying to think.

The volume could be cut in half, but with the exemption, trading will be several times more profitable. Institutions will still move money in & out of stocks. The less daytraders & black boxes, the better.

I'm absolutely serious. How many of you guys do you think are going to survive competing with yourselves and the "institutions still moving money in and out of stocks"? LOL! "Think" again.

By the way, I think it's questionable whether propietary firms would even get an exemption. I'd say if they get serious about this tax, it will be a coin flip.

OldTrader

 

[TraderZones]

Quote from OldTrader:

I'm absolutely serious. How many of you guys do you think are going to survive competing with yourselves and the "institutions still moving money in and out of stocks"? LOL! "Think" again.

By the way, I think it's questionable whether propietary firms would even get an exemption. I'd say if they get serious about this tax, it will be a coin flip.

OldTrader

I would not be surprised to see SMALL traders get an exemption. They did not cause the problem, their loss would hurt a lot of exchanges, brokers and vendors, business news channels, and they vote.

As the bill nears passage, I can already here "My state got calls from 8,000 irate small investors, traders, etc., so we are recommending that traders with accounts/profits/whatever under amount XYZ be exempted. After all, THEY did not cause the financial crisis..."

the "unfortunate victim" cry on the news has a lot of impact....

 

[JOSEF]

Quote from TraderZones:

I would not be surprised to see SMALL traders get an exemption. They did not cause the problem, their loss would hurt a lot of exchanges, brokers and vendors, business news channels, and they vote.

As the bill nears passage, I can already here "My state got calls from 8,000 irate small investors, traders, etc., so we are recommending that traders with accounts/profits/whatever under amount XYZ be exempted. After all, THEY did not cause the financial crisis..."

the "unfortunate victim" cry on the news has a lot of impact....

But what is a small investor? Where draw the line?

 

[jem]

When I traded in a bright office at the dawn of the internet. Trading was a hell of lot easier.

I think I had less competition.
Less competition is good for easy profits.

 

[risktaker]

Completely agree. US market is already garbage, comparable only to 'Vegas slot machine atmosphere. Might as well bring on the tax and get rid of all the leeches & parasites!

Quote from Anaconda:

You can't be serious. You're really not trying to think.

The volume could be cut in half, but with the exemption, trading will be several times more profitable. Institutions will still move money in & out of stocks. The less daytraders & black boxes, the better.

 

[jem]

by the way speculation about an office which runs of the business of a heard of daytraders - is what any trader thinking about the future as a us equity trader has to do...

anticipate or die.

 

[Anaconda]

Quote from OldTrader:

I'm absolutely serious. How many of you guys do you think are going to survive competing with yourselves and the "institutions still moving money in and out of stocks"? LOL! "Think" again.

I am thinking, outside the box. Exemption will be an edge taking advantage of an inefficiency. Maybe you did not trade the particular styles, but edges from inefficiencies and barriers were some of the best way to make money daytrading. The risk/reward ratio was excellent. The more daytraders started to use the same trick, the less valuable it became.

By the way, I think it's questionable whether propietary firms would even get an exemption. I'd say if they get serious about this tax, it will be a coin flip.

Of course, your average prop firm will not get an exemption. It will take clever & unique efforts to get it. Most prop firms are always behind the curve and always have been.

I would expect the majority of daytraders to drop out. The less competition around, the better. Hence, I see this as a potential opportunity if this transaction tax passed through. It may turn out to be that the exemption is only granted to the top market makers and noone else would be allowed. That would suck. But if they follow the LSE model, that might be cool.

 

[piggie2000]

You must be nuts if you think big firms get an exemption under the champion for little people the democrats. if anything they will exempt all small frys and stick it to the big guys.i really can't see this passing. if anything they'll jack up capital gains or tax banks and brokers

 

[risktaker]

Whatever/whoever gets rid of algos & HFT gets my vote.