Your opinion about a tax on automated high-frequency trades? It is supposed to check speculation and tax avoidance through derivatives.
Financial transaction tax
Anthony Murphy
Noah Johnson
Would provoke just capital refugees in switzerland
Hunter Lewis
Just what the doctor ordered. I've been suggesting this for years.
Camden Jenkins
To whom? Lel
Now that the United Kingdom will be out of the EU, there is a real chance to impose it.
Jace Phillips
In NY I mean. It would help pay for our economic recovery (caused by the malefactions of the people we're taxing in this case.)
In fact New York State already has a similar tax in place. Typically that would provide about twice as much revenue as the state would need to cover its yearly budget deficit. But they're corrupt idiots so they just refund the tax and spend months arguing about the deficit every year like little children.
Chase Johnson
How high will the tax for this purpose be?
There's some chance the trade reallocates to another state.
Jason Baker
I haven't looked at the numbers in a while, but I've seen reasonable arguments in the 0.1% to 1% range. Transactions under a certain amount could be excluded so that what we're really targeting is wash trading and excessive abuse of arbitrage opportunities and speculation.
That would probably have to be imposed on the national level (we'd want to hit the Chicago exchanges as well, for instance, anyway).
I see it as another tool in the bag to help curb parasitic behavior, since our regulators do fuckall. It need not be odious -- the primary goal is to disincentivize rampant abuses of currently known methods. Naturally, this is a never-ending battle in the world of "financial innovation" but that just means it's a battle we have to continue to fight rather than ever give up on.
Jonathan Sanchez
This is a terrible, terrible, terrible idea.
Contrary to popular belief, high frequency trading serves a purpose. It provides liquidity to the market. Considering that about 60% of traded volume is by HFT, they prove a lot of it. This is good for 2 reasons.
1) It reduces volatility and bid-ask spreads, benefiting regular traders
2) A lot of this is invested in companies, that use the money to grow and conduct business in general. The fact that this money comes from HFT doesn't make is less real or anything. For this reason, number 1) also benefits companies, and therefore the economy as a whole.
A tax on HFT would result in traders leaving the country instantly. Take Sweden and Italy as examples. Both used extremely low rates as well, but considering the margins anything over 0 is too high.
Oh and inb4 muh arbitrage. Algos trade momentum etc. as well.
Joseph Gray
This, I am into economics and I fucking hate this country for the incredible amount of idiocy in regulation.
Our ruling class is composed by lawyers and state bureaucrats with socialist ideas and they screwed up everything because they can't into economics.
Samuel Johnson
That's not trading; that's speculating. If you want to go speculate, then that's fine; just pay the tax so that you're not being parasitic. Just like protective trade tariffs.
>muh liquidity
Is the typical non-excuse, kind of like how Lloyd Blankfein claims that Goldman is doing "God's work." I don't think he's talking about the same God I talk about.
If liquidity is so big a problem that HFT is needed, then there are very bad structural problems to be addressed. Markets got by just fine with out that very a very long time.
Henry Price
Speculation is healthy and dampens out risk/spikes in the markets. There is zero reason to disincentivize it.
Jayden Sanders
>Transactions under a certain amount could be excluded
The problem I'm thinking here will be that "automated" trades can just flood through amounts under the ceiling and by that method still move the same amounts in a similar period. If you move to declare the myriad trades a part of a single trade for taxation purposes I think the market will just react by diversifying the origins of the transactions to stay below the ceiling (eg a shitload of $1 shelf companies with solicitor directors trading through instead of it all coming from one single source).
Jaxson Garcia
High frequency trading includes scenarios where capital is given to a business and instantly withdrawn afterwards, serving it (the company) absolutely no purpose. I don't see how that kind of liquidity, "over-liquidity", is a problem.
As for transactions moving abroad, yeah, this is a real possiblity.
Nicholas Gonzalez
Yeah, probably. That does seem to be an increasingly popular laundering approach. Perhaps an interesting question would be whether and how that could be structurally identified without inadvertently forcing ourselves at large into a survielance society where there is no more opportunity for disintermediated transactions.
But it seems like we already face that problem, making it worth considering regardless of what other conclusions we might draw about a transaction tax.
Lincoln Adams
>That's not trading; that's speculating. If you want to go speculate, then that's fine; just pay the tax so that you're not being parasitic. Just like protective trade tariffs.
Trading is by its very nature speculative. What is the distinction according to you?
>If liquidity is so big a problem that HFT is needed, then there are very bad structural problems to be addressed. Markets got by just fine with out that very a very long time.
You don't understand. It's not a matter if what's needed. In fact, that is undefinable. More liquidity is always better. This isn't as much of a non issue as you make it out to be. 60% of the money that is currently being invested in companies (remember that is still what the stock market is) would disappear. Do you realise how many of them would go out of business?
We also got by just fine without computers and steam engines. That doesn't mean it isn't progress.
Wrong, you sell back to other traders. It results in more money being in circulation.
Logan Turner
en.wikipedia.org
>In January 1984, Sweden introduced a tax on the purchase or sale of an equity security
>Analyst Marion G. Wrobel prepared a paper for the Canadian Government in June 1996, examining the international experience with financial transaction taxes, and paying particular attention to the Swedish experience.[4
>The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.
>In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax
>On the day that the tax was announced, share prices fell by 2.2%. But there was leakage of information prior to the announcement, which might explain the 5.35% price decline in the 30 days prior to the announcement. When the tax was doubled, prices again fell by another 1%.
>the taxes on fixed-income securities only served to increase the cost of government borrowing,
>Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. On 15 April 1990, the tax on fixed-income securities was abolished. In January 1991 the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the 1990s.
>The Swedish FTT is widely considered a failure by design since traders could easily avoid the tax by using foreign broker services.
Levi Peterson
HFT algos make markets funny and stupid. Taxing them would make thing boring and rational again.
Be careful what you wish for...
Owen Gomez
It's not much of an investment if run the market around trading in and out so fast that it needs to be classified as HFT, done by computer, and then further exploited by being able to front run other trades by having superior network topology. But if I think my sister's small company is worth investing in, provide some capital for it, and then make decisions about whether to increase or decrease that investment, then you can call that speculation, but it's clearly a different animal.
That's admitedly fuzzy, but I'm not looking to eliminate liquidity or speculation as much as to hem it into something less abused and more justifiable.
Eli Carter
en.wikipedia.org
>60% of the trading volume of the eleven most actively traded Swedish share classes moved to the UK after the announcement in 1986 that the tax rate would double. 30% of all Swedish equity trading moved offshore. By 1990, more than 50% of all Swedish trading had moved to London. Foreign investors reacted to the tax by moving their trading offshore while domestic investors reacted by reducing the number of their equity trades.
>as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax
Noah Ward
Stupid as fuck. These fucking socialist need to stop taxing everything.
Blake Thompson
Again, you don't sell back to the companies. Companies give out shares only once (usually), you sell back to other traders.
An aggregate amount of the HFT volume is constantly available and that is direct added value. That amount isn't (and doesn't have to be) 100% for the added value to exist. Also, how exactly is it abused and unjustifiable?
Please take a look at . This specific tax is a proven failure.
Gavin Long
It is the opposite. London won't have a say and since neither you nor France will allow them trading in Euro... They're actually fucked, unless you bleed them to death of course.
Owen Stewart
>Liquidity to the market...
>After 3 years of QE...
Please no.
Those markets are inefficient and kept alive for some to make money out of it. So many bubble are up in our arse that it will hurt when they pop.
Better have those "actors" out of the market now so they won't make it worse when the long awaited correction hits.
Jayden Cruz
Against a tax, but for regulation of order execution.
HFT is akin to skimming traders with a slow connection.
Luis Cook
Don't you have more important problems to worry about?
breitbart.com
Benjamin Roberts
We wouldn't be able to prevent Anglos from trading in Euro, again.
Dylan Scott
>oh noez, a kebab is fucking a smaller kebab, let's forget about having a functioning economy and shit
Sebastian Martinez
HFT is not speculation. It's arbitrage. Nearly 100% of HFT is arbitrage. There is nothing wrong with these strategies. They keep spreads low, trading fees low, prices stable and liquidity high.
Bentley Bennett
>If liquidity is so big a problem that HFT is needed, then there are very bad structural problems to be addressed. Markets got by just fine with out that very a very long time.
Before trading was automated floor traders were the ones who provided liquidity. Floor traders were pretty much HFT before computers. You don't know what you're talking about.