sorry i went back and edited my last few posts while u were replying to flesh out the way i'm looking at it there are surely lots of approaches. personally my most consistent years and gains were in immature and illiquid markets. i definitely prefer 'flow' to 'bots' if i may generalize. it may be wishful thinking though to think a fixed fee would reproduce immature, low leverage mkt conditions
-- I wrote to my representative -- Thank you for voting against the bailout. As for this "transaction tax" being proposed by Rep. Peter DeFazio, D-Ore ... Defazio is making a serious error to estimate the tax would generate $150 billion a year. In reality, the tax would put most traders and hedge funds out of business, resulting in 80-90% fewer stock market transactions, and very little tax collected. A "transaction tax" would simply favor long term investment over short term investment. The famous mortgage backed securities were LONG TERM investments. At the time, the profit margins were high enough that a transaction tax would not have deterred these reckless investments.
You guys have been under attack for years, this really should not surprise you much. LOL, yeah ok, the markets (or whatever u can call US equity BS nowdays) won't miss you. Decades ago, the only traders were a select group of individuals who essentially fleeced the investors. I'm sure the same situation is preferred by a small select group.
<i>Of course you can still make money.. It just won't be on the american exchanges. At least we can be thankful we live in the electronic age where its not that hard to trade the european or asian markets. </I> Does anyone know if there are other exchanges that don't have a transaction tax? For example, this DeFazio guy has made the argument that the exchange in the UK already has a transaction tax. Also, if you go to foreign exchanges, there are not as many stocks to trade as there are in the US market. For example, the UK only has perhaps 1500 stocks while the US has at least 5 times that.
That transaction tax makes it near impossible for a retail trader to day-trade. But registered brokers are exempt from it, so firms like Swift and Title got the setup where it allows their guys to daytrade it.
Does this only affect equities and related instruments? So equity, equity options and equity index futures/options? What about treasury futures and commodities?
the revenue from increased cigarette taxes is already budgeted in most states. As the cost forces people to quit, the requirement for those tax revenues remain. Now, who do you think will pay that bill? This is not an argument for or against cigarettes, but an analogy of the "expected" taxes imposed on "those who deserve it". Same shit, different day. We elect lawyers, we get lawyers.
the transfer tax will, "... damp down the kind of speculation that led to the meltdown." The 1914 to 1966 transfer tax did nothing to stop the 1929 crash. If they really want to increase tax revenue, lower the capital gains rate. Intentional crisis creation. If the tax returns, how will the brokerages be bailed out as trading will plummet? Money flowing out of the country... Very interesting that businesses and individuals that act responsibly, save and invest their money as they wish - short or long term trades, long or short - are the ones being punished, whereas those that go into excessive debt or take position of extremely absurd risk are bailed out and made to look like victims.
Dems think more taxes are the solution to everything. If Obama is elected, imagine what he could do in concert with Pelosi and Reid.