Financial Transaction Tax on Options

Discussion in 'Options' started by ranger64, Dec 3, 2009.

  1. ranger64


    as discussed in many other threads here, we might soon have to deal with a transaction tax on all financial activities. when trading futures, you would have to pay 0.25 percent of the contract value, which would kill futures daytrading. what about options? would the 0.25 percent transaction tax be applied to the premium or the underlying?
  2. cvds16


    forget it, this will never happen ...
  3. ranger64


    what makes you so sure?
  4. cvds16


    it would destroy the financial world as we know it, and politicians know that or at least their advisors will ...
  5. I earn a living making a market in Options. That would be idiotic. Where do you think my money goes. It goes into the community etc.. when I buy goods and services etc..

    I seriously doubt it would pass unless they want to see a liquidity implosion and bid ask spreads wide enough to drive a truck.
  6. The gubbermint is desperate for add'l revenues. OTOH, some know that they can't wreak havoc with the system. Don't be surprised if they implement a smaller transaction tax one one or more investment vehicles.
  7. You need to educate yourself on how the world really works. Those who lobby & contribute the most would stand to gain a lot from this via special exemptions.
  8. The bill was introduced today. It should be availavble on the internet in 2 or 3 days, it has .25% for stocks, and .02% for futures. So for every 100k u trade in futures its 20 bucks each way, 40 dollar round turn. If you sscalp it sucks, if you trade options for bigger gains, intra day swing trade. You might be ok
  9. the1


    This isn't as bad as it could be on futures but it will still kill volume in these markets. At this rate, you would have to make a full point just to break even. Assuming $40 RT + $5+ in commish you need 1 point to be ahead by $5. That pretty much increases the slippage (for lack of a better term) from 0.25 to 1.25. There will be a mass exodus from this market, or activity will be reserved for only the best opportunities killing volume either way.

  10. zdreg


    this is another accurate post which will escape the hoi polloi who post on ET.
    with exemptions ET posters will be out of business.

    note how ET posters are all trying to catch breaks for their instruments. of course the
    ET posters are clueless that this is the just start.
    one non stop poster claimed that one can be become a binary option trader.
    what a joke.
    #10     Dec 3, 2009