61 replies to this topic

[PrincelyM]

Here's an article that was in the NY Times today. A 1/4% tranaction tax perhaps levied when you buy and when you sell. So if you bought and sold 1000 shares at 20, it would cost you $100, win or lose. This would also be levied on futures and options. As I see it, it would end active trading as this cost would become prohibitive. I would suggest that you speak against this, and resist it vigorously at every level, to include with your Congressmen and Senators. This could potentially become a popular idea amongst non-traders, and uninformed "economists".

http://www.nytimes.c...rbert.html?_r=2

IT

IT, for whats its worth, here are my 2cents on this...From someone who has been there before...I dont trade the US mkts...emerging ONLY...Indian markets only because thats the way I am set up..I visit TT mostly to learn more and to get ideas coz other mkts essentially follow US no matter what anyone says...Some time ago, the Indian market authorities did something similar to this....Sure volumes decreased and sure day traders were screwed..but overall it did not make that much of a difference..I mean to say ppl continued trading as is...sure there are downsides but if the authorities want to do this, they WILL no matter what...and we will trade no matter what....just my 2 cents

Edited by PrincelyM, 14 January 2009 - 11:43 PM.

[IndexTrader]

All the arguments presented here against a transaction tax sound like a chicken little warning to me. People are still going to trade and, guess what, the institutiions will be paying the lions share of the tax. They are the ones doing the constant day trades with their computer programs. And guess what, they dont care about any tax............they play with opm.

Trillions of dollars in debt have to be paid off somehow, duh! Transactions taxes are a start along with higher gasoline taxes, a VAT, and others. Wealthy people who want the security and protection of living in the greatest and strongest country in the world may soon have to pay a tiny portion of the expenses in operating it. The fun has been had, now it is clean up time.

I love the way you dismiss daytrading as a strictly "institutional" affair, thereby dismissing an industry of independent traders, such as myself. I'm guess you didn't read the link to Green and Co., a tax advisor who would be in the position to know something about day trading. Do you really think 2+ million ES contracts per day comes from swing trading?

But next, you go on to make a claim that institutions are the day traders, and they will be paying the tax, and that they don't care because it's someone else's money. I don't think institutional traders will make trades where the arithmetic is against them. And if they do, and it doesn't work out, the customer will pull the money. You really need to spend some time considering these points.

What you're talking about reduces liquidity, without any question. This then leads to a drying up of capital markets. That's what you want to do?!?

IT

[danzman]

I would suspect CME would be trading at about $5 if this was going to happen. D

[IndexTrader]

Here's an article that was in the NY Times today. A 1/4% tranaction tax perhaps levied when you buy and when you sell. So if you bought and sold 1000 shares at 20, it would cost you $100, win or lose. This would also be levied on futures and options. As I see it, it would end active trading as this cost would become prohibitive. I would suggest that you speak against this, and resist it vigorously at every level, to include with your Congressmen and Senators. This could potentially become a popular idea amongst non-traders, and uninformed "economists".

http://www.nytimes.c...rbert.html?_r=2

IT

IT, for whats its worth, here are my 2cents on this...From someone who has been there before...I dont trade the US mkts...emerging ONLY...Indian markets only because thats the way I am set up..I visit TT mostly to learn more and to get ideas coz other mkts essentially follow US no matter what anyone says...Some time ago, the Indian market authorities did something similar to this....Sure volumes decreased and sure day traders were screwed..but overall it did not make that much of a difference..I mean to say ppl continued trading as is...sure there are downsides but if the authorities want to do this, they WILL no matter what...and we will trade no matter what....just my 2 cents

Let me just say that I know next to nothing about the Indian market. Perhaps NAV will weigh in. But in your own post, you say volume decreased. But for some reason you then go on to say that it didn't make much difference. Huh? Volume decreased, meaning liquidity decreased. That probably means execution cost went up. So something definitely changed. Money moved elsewhere. And people were left paying a cost that in a sense was hidden because they could not compare the new higher execution cost with what existed before. If they could they might have complained more. And, with due respect, the Indian markets really don't compare to the US markets do they?

If the politicians do this, people will change their trading habits. In fact, the article at the link says this is a goal. You won't have a choice because you won't be able to trade actively with that type of overhead. Let me see if I can compare. When I first got into the business I was a stock broker. Commissions were huge. Commissions were such that it might take $1-$2 move to cover them in and out. In those days, in the mid-70s no one day traded at all. You couldn't. And at that time, on a heavy day, we traded 30 million shares. Compare that to today.

Let's forget for a moment about the impact on individual traders. Again, active traders will simply cease to exist. But further, the brokerage industry as it existed will cease to exist too. You think Ameritrade will charge $10 a trade, or IB will charge $1, when trading activity dries up. Of course not. Commissions rise. That's just a start of what will change.

IT

[OEXCHAOS]

You guys aren't doing the math. If they do this, I'm moving. Period. I'll deal with inferior markets that I and those like me can improve. They can run this country into the ground. Stock up on shotgun shells fella's. I'm outta here. Seriously. TT will go away, because there won't be a market for our clientele and there won't be a business for our better advertisers. Sure, we'll have a community out of NZ, but it'll be a hobby. If that. Think on it. .25% is a lot when the average return might be less than 1%. M

[VolPivots]

If they're looking for a scapegoat for all of this mess, look within, not externally And if there's one class of speculators that should be targeted, it's those darn high frequency program traders that use raw size and power aided by computer generated 2-ways to manipulate the markets regardless of "investing" funnymentals.....go after them, or better yet, ban it outright. Then markets would trend better, fundamentals would be more meaningful and daytrading would become an afterthought

[dasein]

The only taxes that get passed are taxes that hit a minority constituency which doesnt have a lot of lobyying power. so maybe this will pass. as to the money they need, well maybe they should figure out how to get some back fro the people who benefitted most from this asset inflation credit bubble, those who actually transferred the wealth from the middle class to their own pockets, not just traders? The Vermont independent congressman suggested a one time wealth tax - this would be a very small amount, and it would be done and gone immediately, so that it would not be economically disruptive. never happen, both parties are paid by the same people, and these are the people with outsize gains ould be the ones to lose most. Of course, a gas tax would have saved us a lot of problems from global warming to useless and expensive gas guzzlers now being dumped, but that constituency is sacrosanct - so do not look for a sane tax policy anytime soon. probably more sin tax hikes since these hurt a minority that everyone loves to hate. There are lots of possible taxes, but what really is so bad about the plain old income tax that we have had for almost one century, and lowering the inheritance exemption back to a reasonable aount.

[zigzag]

You guys aren't doing the math.

If they do this, I'm moving. Period.

I'll deal with inferior markets that I and those like me can improve. They can run this country into the ground. Stock up on shotgun shells fella's. I'm outta here.

Seriously. TT will go away, because there won't be a market for our clientele and there won't be a business for our better advertisers.

Sure, we'll have a community out of NZ, but it'll be a hobby. If that.

Think on it.
.25% is a lot when the average return might be less than 1%.

M

Have you given any thought to where you would go?

[LongShort168]

I thought you all love OB... humm...maybe Bush is better after all...

[zigzag]

“It’s a very progressive tax,” he said, “that discourages nonproductive activity.” There it is. That's how these folks see traders.