That is one of the very few sensible remarks anyone in this forum, besides myself of course, has posted in quite some time. I am, naturally, not in favor of implementing the tax in the way that is being proposed by the economically illiterate and uncreative legislators. Stiglitz would know how to do this correctly to accomplish the desired end without destroying the markets. He is smarter than the average legislator.
The market has crashed many times since the dawn of the markets without HFT. You can go back to early 1800's if you would like and see massive one day drops. Quit blaming all your ill's on them and wanting this insane tax to get rid of them! The fact you want this, tells me you do not trade. Move along!
Not in six minutes! and then make a full recovery in two. The other thing I would, with great pleasure, call to your attention, as you are a trader, is that after some of the past crashes you mention, serious and effective remedial actions were taken. Perhaps, you have heard of Glass-Steagall, Joe Kennedy and the SEC, the up tic rule, and the demise of "portfolio insurance."
This post makes a good point by implying that those who have proposed a bad FTT lack my powers of imagination , but it offers no logical argument as to why what I propose would not work. Instead it's argued unconvincingly that an intelligent FTT can't be implemented because there will be opposition to it. I would accept this argument as valid if it were the HFT that would be the ones to decide on, and implement, the FTT. It isn't!
I believe in being pragmatic. I'll leave the quixotic dreams to you. BTW, are you having a hard time coping with HFT? I am quite indifferent to their presence because of my trading time frame, but I believe several day traders on this thread are equally unfazed by their presence. Perhaps you could take a leaf from their book and figure out how to trade successfully in the current environment. I mean this sincerely, not as an insult. Whilst we're at it, regarding the argument that HFT causes ultra rapid market crashes, if that is a concern then we really need to ban all computerised trading and go back to phoning in orders to our brokers who then phone them to the pit(s). Not all algorithmic trading is HFT, but any algo will set about selling faster than any manual trader can. I've been through a market crash in Thailand where there was no HFT at all, indeed access was throttled to ensure an orderly market at the time, so just computerised direct access. The index pissed away some 7% before I could enter my individual liquidation orders for the 8 positions I had on. (Brokers here did not have great platforms so you did not get to enter all your stop orders in advance, just market or limit.) All you need for a crash is panic selling.
Under normal circumstances I too am indifferent toward HFT. Some HFT claim to make money. If they do, where does the money they make come from? (Don't answer. It's a rhetorical question intended to make us both think.) HFT make use of computers. That does not make computers bad anymore than STD makes sex bad. I'm still waiting for a logical, counter argument, but thank you for trying.
You completely missed the point about computers, go back and read my post slowly. To refresh your memory, from your earlier post "I want it to stabilize equity markets, to drive the subpenny boys off the exchanges, i.e., those clever folks responsible for a 600 point loss in 5 minutes". Don't you think any large hedge fund with algo driven computerised trading can trigger such a crash? Not all algo trading is HFT. http://en.wikipedia.org/wiki/Algorithmic_trading
piezoe Registered: Jan 2006 Posts: 5041 Under normal circumstances I too am indifferent toward HFT. Some HFT claim to make money. If they do, where does the money they make come from? (Don't answer. It's a rhetorical question intended to make us both think.) HFT make use of computers. That does not make computers bad anymore than STD makes sex bad. I'm still waiting for a logical, counter argument, but thank you for trying. --------------------------------------------------------------- I think the case has been made on the hundreds of pages prior to this one and how it would put everybody out of business, if you can't see that, nothing can be done for you.. If you think they would put it in at a rate where it does no harm...dream on..that is not their intention to do no harm. As i have said before ..do the math on the proposed rates. that should be self evident. The very thought of HFT being a problem and FTT is not.. further proves you are totally clueless.