Transaction Tax

Phantasmal

Phantasmal

Administrator
Staff member
What do all you think of the transaction tax on speculative deals? I know a lot of you have made big money in stocks, how would this effect you?

Thanks.
 
1) Every transaction is speculative in nature. Whether it is on a new home, new car, stock, bond, option contract, futures contract, mutual fund etc.... The whole notion that speculation is bad is simply fear mongering from those who don't understand the nature of investing.

2) That said, the proposals I have seen are for a minimal percentage on all stock, bond and derivative investments. For the average investor, I doubt they really even notice. On a $10,000 investment you are looking at $10 for a stock or bond trade and $1 for a derivative trade. For day traders, depending on the size of their trades, that can really bump up their fees.

3) I think the ones hit the hardest will be the big investment banks with their high frequency trading systems. Trading hundreds of millions of dollars at once, that tax will add up. They will likely just reconfigure their trading algorithms to account for the higher costs. My GUESS (please note the word guess) is that it will slow down some of their volume. I think this would help cut down on some of the wild swings we have seen.

4) That said, I don't like the whole concept being promoted that the money raised go to some sort of automatic redistribution of wealth like some are proposing. The tax revenue should go into the general fund. I don't think they have any idea just how much money this will raise, so pigeon holing it to set payees is not a wise move in my opinion.

5) If I were them, I would re-implement the uptick rule at the same time as passing this. Make it a law. The SEC cannot be trusted to do what is right.
 
What I head is like a quarter per trade. Wouldn't bother me a bit as a retail small investor.
My fear is that folks will think that is enough.
We need major systemic change, time for the oligarchist stop having the rules tilted in thier favor.
 
Superfreak said:
1) Every transaction is speculative in nature. Whether it is on a new home, new car, stock, bond, option contract, futures contract, mutual fund etc.... The whole notion that speculation is bad is simply fear mongering from those who don't understand the nature of investing.

2) That said, the proposals I have seen are for a minimal percentage on all stock, bond and derivative investments. For the average investor, I doubt they really even notice. On a $10,000 investment you are looking at $10 for a stock or bond trade and $1 for a derivative trade. For day traders, depending on the size of their trades, that can really bump up their fees.

3) I think the ones hit the hardest will be the big investment banks with their high frequency trading systems. Trading hundreds of millions of dollars at once, that tax will add up. They will likely just reconfigure their trading algorithms to account for the higher costs. My GUESS (please note the word guess) is that it will slow down some of their volume. I think this would help cut down on some of the wild swings we have seen.

4) That said, I don't like the whole concept being promoted that the money raised go to some sort of automatic redistribution of wealth like some are proposing. The tax revenue should go into the general fund. I don't think they have any idea just how much money this will raise, so pigeon holing it to set payees is not a wise move in my opinion.

5) If I were them, I would re-implement the uptick rule at the same time as passing this. Make it a law. The SEC cannot be trusted to do what is right.
Click to expand...


I was going to ask the same question about speculative. Unless someone is promising you a guaranteed return what type of investment isn't speculative by nature?
 
The Dude said:
What I head is like a quarter per trade. Wouldn't bother me a bit as a retail small investor.
My fear is that folks will think that is enough.
We need major systemic change, time for the oligarchist stop having the rules tilted in thier favor.
Click to expand...

I have seen two proposals, the one here in the US is for a 0.1% tax on stock and bond trades and a 0.001% tax on derivative trades.
 
Superfreak said:
1) Every transaction is speculative in nature. Whether it is on a new home, new car, stock, bond, option contract, futures contract, mutual fund etc.... The whole notion that speculation is bad is simply fear mongering from those who don't understand the nature of investing.

2) That said, the proposals I have seen are for a minimal percentage on all stock, bond and derivative investments. For the average investor, I doubt they really even notice. On a $10,000 investment you are looking at $10 for a stock or bond trade and $1 for a derivative trade. For day traders, depending on the size of their trades, that can really bump up their fees.

3) I think the ones hit the hardest will be the big investment banks with their high frequency trading systems. Trading hundreds of millions of dollars at once, that tax will add up. They will likely just reconfigure their trading algorithms to account for the higher costs. My GUESS (please note the word guess) is that it will slow down some of their volume. I think this would help cut down on some of the wild swings we have seen.

4) That said, I don't like the whole concept being promoted that the money raised go to some sort of automatic redistribution of wealth like some are proposing. The tax revenue should go into the general fund. I don't think they have any idea just how much money this will raise, so pigeon holing it to set payees is not a wise move in my opinion.

5) If I were them, I would re-implement the uptick rule at the same time as passing this. Make it a law. The SEC cannot be trusted to do what is right.
Click to expand...

Thanks, I am sure you made your suggestion to the right ears. You have given me information to read up on, thanks.
 
Rana said:
Thanks, I am sure you made your suggestion to the right ears. You have given me information to read up on, thanks.
Click to expand...

you are welcome. I am bouncing back and forth on this idea. They need to do something to slow down the high frequency trading systems. If they refuse to put the uptick back in place, then this may be the only option.
 
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