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This Proposal Could End Active Trading


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#11 IndexTrader

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Posted 14 January 2009 - 10:09 PM

It wouldn't hurt swingtrading, it would kill daytrading. Scalpers would have to alter their trading style.

U.F.O.


It would definitely kill daytrading/scalping. This would reduce liquidity. So execution costs would definitely go up on "swingtrading". Reducing liquidity in some of the finest markets in the world just doesn't seem like a laudable goal. Money will simply move offshore.

IT

#12 zigzag

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Posted 14 January 2009 - 10:11 PM

Whoever proposed this or supports this probably thinks trading of any kind is a useless contribution to society. They don't have a clue.

#13 unosuke

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Posted 14 January 2009 - 10:14 PM

Evidently you're not an active trader

I record all my trades on my TT blog. 'Active' is a relative word. I usually aim for > 0.50% profit, fwiw.

This tax is paid regardless of whether your trade is profitable or a loser. Now add that to your commissions.

I said "a profitable trader" would have to earn more - I'm aware losers will pay as well. Same as commissions, which I neglected to mention in trading costs (as well as taxes on capital gains).

No harm in disagreeing.
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#14 IndexTrader

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Posted 14 January 2009 - 10:15 PM

I'm biased of course but it makes no sense to tax something where liquidity is being provided and folks are making a living. WHy not tax useless or harmful things like tobacco or junk food, for instance, which really don't add much to the common good.

I have no idea how many active scalpers like me are out there. Would the institutions, like Morgan Stanley and others pay the same tax?

It doesn't smell right to me.

mm


Lots of active scalpers/daytraders out there. For example, just take a look at the 2+million contracts traded daily in the ES. That's 2+ million times contract size of $50,000. Then there is all the other index futures, SPY, QQQQ, options, etc etc. Imagine that they decide to levy that .25% on the contract size of $50K. That could be $250 per round turn, plus commissions. That would end that market.

Politicians don't understand that liquidity provided is a benefit...and it sounds like some of the posters in this thread are unaware as well.

IT

#15 zoropb

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Posted 14 January 2009 - 10:19 PM

I'm biased of course but it makes no sense to tax something where liquidity is being provided and folks are making a living. WHy not tax useless or harmful things like tobacco or junk food, for instance, which really don't add much to the common good.

I have no idea how many active scalpers like me are out there. Would the institutions, like Morgan Stanley and others pay the same tax?

It doesn't smell right to me.

mm


Totally agree mm...TAX SPENDING! it is what got the country into the mess in the first place. If you cannot afford it do not buy it and if you do buy it you pay extra tax to pay down debt. Do not tax savings or investment. How hard is this to understand. lol

Z

Short to the gold buy trade: from 2900. Day total:  +25.75

Total +476.50

 

I run a traders Blog with high probability targeting on ES , closed to any new members.


#16 zigzag

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Posted 14 January 2009 - 10:20 PM

I'm biased of course but it makes no sense to tax something where liquidity is being provided and folks are making a living. WHy not tax useless or harmful things like tobacco or junk food, for instance, which really don't add much to the common good.

I have no idea how many active scalpers like me are out there. Would the institutions, like Morgan Stanley and others pay the same tax?

It doesn't smell right to me.

mm


Lots of active scalpers/daytraders out there. For example, just take a look at the 2+million contracts traded daily in the ES. That's 2+ million times contract size of $50,000. Then there is all the other index futures, SPY, QQQQ, options, etc etc. Imagine that they decide to levy that .25% on the contract size of $50K. That could be $250 per round turn, plus commissions. That would end that market.

Politicians don't understand that liquidity provided is a benefit...and it sounds like some of the posters in this thread are unaware as well.

IT


I guess if 'they' get serious about this it will be time to sell the rumor And sell the news :lol:

#17 traderpaul

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Posted 14 January 2009 - 10:25 PM

This market was born with low commissions....low taxes.....narrow spreads.....The opposite will be a bear market.....with high taxes.....Wide spreads.....drive many day traders and investors away......We are heading back to SPX 300...... If they make it a law....The Market makers and the specialists have to pay the same taxes......

Edited by traderpaul, 14 January 2009 - 10:30 PM.

"Inflation is taking place now. Prices may not appear to be rising because they are making packaging smaller. " Rickoshay

#18 IndexTrader

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Posted 14 January 2009 - 10:26 PM

Evidently you're not an active trader

I record all my trades on my TT blog. 'Active' is a relative word. I usually aim for > 0.50% profit, fwiw.

This tax is paid regardless of whether your trade is profitable or a loser. Now add that to your commissions.

I said "a profitable trader" would have to earn more - I'm aware losers will pay as well. Same as commissions, which I neglected to mention in trading costs (as well as taxes on capital gains).

No harm in disagreeing.


I agree that "active is a relative word". However, in this context, perhaps Green and Co could shed some light on what "active" means. He says that many "active" traders trade in excess of $10,000,000 worth of stock per year. What that means is that a tax of $25K-$50K per year would be levied on these traders, depending on exactly how a potential new law would read.

I'm not concerned if you disagree and think this tax is a good thing. But one thing it is going to do is reduce liquidity in the markets.

By the way, your blog doesn't appear at your link, or in the list of blogs on TT.

IT

#19 zoropb

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Posted 14 January 2009 - 10:26 PM

I'm biased of course but it makes no sense to tax something where liquidity is being provided and folks are making a living. WHy not tax useless or harmful things like tobacco or junk food, for instance, which really don't add much to the common good.

I have no idea how many active scalpers like me are out there. Would the institutions, like Morgan Stanley and others pay the same tax?

It doesn't smell right to me.

mm


Lots of active scalpers/daytraders out there. For example, just take a look at the 2+million contracts traded daily in the ES. That's 2+ million times contract size of $50,000. Then there is all the other index futures, SPY, QQQQ, options, etc etc. Imagine that they decide to levy that .25% on the contract size of $50K. That could be $250 per round turn, plus commissions. That would end that market.

Politicians don't understand that liquidity provided is a benefit...and it sounds like some of the posters in this thread are unaware as well.

IT



Yep.... you can count me out of US trading if they pass it and lots and lots and lot and lots of traders and $ gone.

If they pass it the next swing trade will be from Dow 100. Ok well maybe I will trade that one lol.

Z

Short to the gold buy trade: from 2900. Day total:  +25.75

Total +476.50

 

I run a traders Blog with high probability targeting on ES , closed to any new members.


#20 denleo

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Posted 14 January 2009 - 10:43 PM

If they pass something like this, most of active trading hedge fund and private money will move to other countries. In other words, about $500Billion dollars according to our economists, will leave the United States. Denleo