Transaction tax in germany

Quote from Millionaire:

Not if the 0.01% tax applies to everyone trading on eurex, then you can bet 100% eurex wont be doing decent volumes.

However if certain parties are exempt from the tax then eurex will still have a chance.. but i think there is a good chances retail day traders will get shafted.
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Just so I know,when you say 'retail day traders' are you talking about the IB & Velocity lot who already pay crazy rates?
 
Rats, stray dogs and the homeless are going to take over the highrisers of Frankfurt, should this tax ever become law without any exceptions.

Time to learn Mandarin or Cantonese, I guess.
 
Quote from Marsupilami:

Rats, stray dogs and the homeless are going to take over the highrisers of Frankfurt, should this tax ever become law without any exceptions.
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So, it will not differ much from the present...:cool:
 
Quote from sculptor66:

As far as I know, the Bund future has already been traded on CBOT for some time in the past, but, of course, without much success then. It seems very likely that it will stage a comeback at (now) CME Group, if Germany introduces its transaction tax. Other instruments may follow.

I can already hear German politicans crying about this. But then it will be too late. Well, if one refuses to learn from (Swedish) history...
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Thanks for a piece of (rare) factual info!

Quote from electricshock:

So you list (in your opinion) good reasons why the demise of Eurex will happen and then give reasons why it won't happen.
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"Demise" is a strong word. The opinion I voiced originally and stand by is if the transaction tax goes ahead the way it's planned currently, German exchanges will loose volume in a number of popular instruments including futures and stocks.

Stop putting words in my mouth. I never said they would go out of business.

It seems that you see only 2 mutually exclusive options:
1) German exchanges will go out of business;
2) German exchanges will grow and prosper for foreseeable future.

A third route like slow stagnation for a few years doesn't seem to occur to you.

Regarding specifically Eurex, it's partnership between SIX Swiss exchange and Deutsche Börse with headquarters in Zurich. Moreover, they wholely own ISE in the US. As an electronic-only venue they may find it easier than it seems to list some of their products in a venue outside Germany if commercial and political circumstance warrant it.

That cannot be said of Deutsche Börse. Listing an stock in a foreign jurisdiction is more complex, expensive (then a future) and requires cooperation of the stock issuer.

Quote from electricshock:

You want to make you're mind up.

In my experience guys who flip/flop don't last too long.
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I can certainly last long in this discussion with you.

Seeing everything as either black or white masks most details in a picture from a viewer.
 
Quote from electricshock:

Just so I know,when you say 'retail day traders' are you talking about the IB & Velocity lot who already pay crazy rates?
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1 euro each side is what i pay for a DAX contract using IB unbundled rate, hardly a crazy rate.

Paying an additional 20 euros in tax (im assuming this tax will be applied to both the buy and sell) is a massive extra cost.

Even if it only applies to one side, paying 10 euros extra, is still a 500% increase in my commision costs.
 
Quote from LeeD:

Yes, absolutely. At least, it will start trading elsewhere and volume will move out of Germany... unless foreign entities trading from abroad are excluded from the tax.

For example of how this will happen see how ICE is trying to "steal" volume from CME by offering lower commissions. They have little success so far as the contrats are different futures than CME ones (even though with identical terms), i.e. if you open a future trade on ICE you can't close it on CME. Further, volume staying on CME is self-fulfilling. If there was such a huge incentive as trasaction tax, the volume could move overnight.

For equities the move is eaven easier than for futures. Many larger companioes alreayd have equities listed in multiple venues. Ultimately, it will be up to each individual German company whether they will want to get their stocks listed in London, Dublin, Amsterdam or Warsaw.
German personal-account daytraders will pretty much have to.

Banks and larger HFT shops will be excluded from the rule as marketmakers.

Hedge funds may have tax dodge here. Because the fund management companies don't trade their money... but rather trade money of a financially independendt entity located somewhere like Cayman Islands, they may avoid trasaction tax altogether unless they trade German stocks etc.

Same may work for prop shops.
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Your words not mine.

Clearly you think the end is possible for Eurex - or at least you did on page 2 before the flip/flop.

Now after some thought you know you're wrong and there is a 99% chance they continue and continue well.

As if they are going to go out of business - only a true idiot or amateur would think that.
 
Quote from Millionaire:

1 euro each side is what i pay for a DAX contract using IB unbundled rate, hardly a crazy rate.

Paying an additional 20 euros in tax (im assuming this will be applied to both the buy and sell) is a massive extra cost.
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2 Euro a R/T is a shit rate.

At the professional (where we are) clearers 1 Euro a R/T is on the high side.
 
Quote from electricshock:

2 Euro a R/T is a shit rate.

At the professional (where we are) clearers 1 Euro a R/T is on the high side.
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The transaction tax is actually worse for traders whos business models require low commision rates, unless they can get an exemption ofcourse.

Im not a scalper.. i make about 10 day trades a day.. so paying 2 euros per contract as opposed to prop firm rates is not a huge issue for me.

However if this tax applies to me it will eat a big chunk of my profits.
 
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