That statement jumps out at me. If Odumba gets re elected, I'm sure he'll push, and get his way in taking more $ from the wealthy via hedge fund taxation. A hf is set up as a pass through entity, menaing the gains are passed through to the investor at a 15% tax rate. This beats the heck out of being taxed at 35% on for example, short term (realized) gains in an individual account. The wealthy love hf's for this. The odumba administration wants to tax hf's at 20%. If they get their way, you can guarantee that hedge fund inflow will decrease, and redemptions will increase. It wouldn't imo collapse the hf industry, but sure as hell won't help! Nor would this be any good for the markets. Volume would decrease, and since volume leads price... Gotta love Odumba, and his team of (record number) limo-riding socialists...
Most experienced traders should be able to pass the exam if they take some time to really focus on studying for it. If anything, they should already know a lot more of the material than the fresh college grads. Keep in mind the test is all multiple choice and lasts just a couple of hours (and you can get 30% wrong), so it's a format which isn't too tough for those who haven't taken tests in a long time. The Series 56 should ultimately be a much more relevant exam than the Series 7 for prop traders (and shorter and less expensive too), so CBOE firms could still have an advantage in that area.
I disagree 100%. Like was mentioned before, Echo, Hold and Bright have always required a Series 7 and those firms have been in business for over 10 years. Passing an exam, whether its the 7 or the 56, is a small barrier to entry to a prop trading career. Trading is all about discipline....so is studying for an exam. If you don't have the discipline to study for an exam then you probably just saved yourself a lot of money because you probably would have lost it all trading. I do agree with the statement that a lot of "veterans" might struggle studying....but hopefully they will get waivers.
I think you might be confusing taxing the managers of HF's and PE's and taxes for the investors. They are all set up as either LLC's or LP's. For tax purposes, those are disregarded entities. So, all LT gains are passed through to investors and taxed at 15%. Nobody is seeking to change that. What the government (and especially the Dumbocrats and the head Dumbo even more especially) have been going after is how the managers are taxed. The managers take (typically) 20% of the return. Let's assume that the manager has not invested any of his own capital in the fund. If half that return is LT cap gains, he passes through that tax treatment to himself as LT cap gains (just like for the investors) and pays 15% on 50% of his performance bonus. The management fee (assessed on capital under management and usually running between 1-5%) is always taxed as income. The government wants to reclassify the percentage of profits (performance bonus) that managers take as "income" - which is taxed at the income tax rate (likely 35% if the managers is even mildly successful) even if 100% of the revenue comes from LT cap gains. That's the tax issue surrounding hedge funds, but mostly this is an issue for Private Equity and Venture Capital since almost 100% of their investments are long term. And, of course, you will probably point out that if that tax treatment for managers changes, the fees for investors will go up. But, you know....as long as our overlords in congress get more of our blood to feast on, every libtard in America will jump for joy. Never mind that the only thing that's growing in America is the deadweight loss of government.
I agree with you. But, having looked at the material tested, I don't think the professionals who have been in the industry for a long time as independents will have trouble. Most of the people running independent options firms already know a lot of the 56 stuff. Newbies should be able to learn what's on the 56 just like they've had to learn stuff for every test they've ever taken in school. The problem is the time given to people. For traders at daytrading firms, I think you guys are approaching enough time to pass with this extension. The principals of all daytrading and non-daytrading firms are still screwed because they must pass not only the 56, but also the 24. The compliance officers in the firms must pass the 56, 24 and 14 - all within a couple of months. Not doable. My understanding is that few of you posting here are principals. You'll be fine. Don't worry . The CBOE announced Friday that they will be holding webcasts this coming Wednesday and Thursday to review the exam and talk about study material.
I don't see how a recent college grad will have an advantage over someone already in the biz. If anything it's the other way around. At the end of the day those who need to take the test will study properly and pass.......or not study enough and fail. Pretty simple. As far as this person claiming that the older traders saying this is going to knock them out of the biz? That's laughable. Any trader who thinks this will end their career because of this probably should leave the biz anyways....because if the pressure of taking a 100 question test scares them, then how the hell are they going to make money trading?
It seems all the training companies are alert to the series 56 now. I received several messages on Friday that they will all be rolling out study info soon. Has anyone done a google search to see if anything is available yet?
WOW! Your post below is among the most insightful and thought provoking I've yet read on ET. I hope everyone will read it. And thank you! I am an advocate for government regulation, as I believe it is essential for the preservation of free and open markets and competition in a capitalist economy. However, inept, overzealous, or evil intended regulation can erect barriers to free competition and entry into markets. Under that kind of regulation, capitalism can deteriorate into monopolies, cartels, and "crony capitalism." It would seem the U.S.A. is headed down the latter path of bad regulation that, as you say, will exclude and build barriers.
Yep...all good. The world is not coming to an end for Prop Trading contrary to what some people keep posting on Elitetrader. This is a small, small speed bump.