according to this - it would also be the end of all mutual funds. where should traders look for "real jobs"? maybe in the auto industry?
Anaconda wrote: <b><i>I doubt it will drop more than 30%, and that is exaggerating. The market making black boxes will pick up the volume, as they will be exempt.</b></i> Based on what exactly? In Sweden the volume of their 11 biggest stocks dropped by 60%. <i>The impact of a Swedish regulatory move to impose transaction tax was the migration of business from Stockholm to London. According to a study by Swedish researcher S R Umlauf in 1993 âTransaction taxes and the behaviour of the Swedish stock market,â published in Journal of Finance and Economics, following the doubling of the tax, 60 per cent of the volume of the 11 most actively traded Swedish stocks migrated to London. </i> http://sify.com/finance/fullstory.php?id=14736591&cid=20826
This is a comprehensive study loaded with statistics on the aftermath of a small STT to fund just the city of New York. IBO New York City Independent Budget Office Background Paper November 2003 Reviving the New York Stock Transfer Tax http://www.ibo.nyc.ny.us/iboreports...transfertax.pdf The tax would range from 0.625 cents to 2.5 cents per share, depending on share price. So at a share price of $20 and a tax of 2.5 cents per share: $0.025/$20=0.00125 or 0.125 percent rate which would be only half of the proposed tax of 0.25 percent. IF investors do not migrate to other exchanges: Trading volume would drop 18%. 60,000 jobs lost. (Those are just numbers, not people with families to feed) Revenue gain would only be $3 billion. $600 billion loss in equity value $300 billion loss in household wealth If trading activity drops by 1/3: 150,000 jobs would be lost and net city revenues would fall to ZERO. I thought a trans tax was supposed to rake in hundreds of billions?
on ES mini future a roundturn single contract would cost you 200.00 USD.... future trading will be history if this tax passes (in USA : -) )
If this passes and if it's based on the value of the underlying, you can kiss the futures biz goodbye. Being down 4 ES pts right away before the trade has even happened is a great way to tell your customers to go elsewhere. If this passes, I would imagine the CME and Co will be pressing hard to have the % based on the margin bond or some other value.
This bill targets derivatives. About $500 trillion in derivatives trades alone in 2008--the most speculative of transactions. A one tenth of one percent tax would raise $500 billion dollars a year. You are just collateral damage of this fairer system.
Well if thats true they should exempt stocks from this tax as thats what the majority of americans invest in through mutual funds, etc... -Guru
Defazio vs. Chicago interests. Defazio vs. New york interests. It doesn't seem more to it than Defazio(Oregon!!) It's not gonna happen. It doesn't mean we should ignore it. Relating loosely to this non-sense. Read about traders' haven on earth in SFO magazine. Trans. tax never gonna happen there. Talking about South Korea. Read it. It might be coming to U.S. via CME. P.S. Thought about writing something positive for the change.
Look at UK then. Did their volume drop by 60%? Regardless, this is USA. This tax targets the daytraders & smaller funds. Look outside that world. This market runs on mutual funds handling pension money, large institutions running arbs and some large hedgies. And then you got the black boxes in the middle, run by the major bulge bracket firms. They are not on your team, especially the market makers. With exemptions, they would support this tax, why wouldn't they.
the k200 is already in the us - interactive brokers offers it. the cftc approved it several months ago. maybe sfo should do some better research