Would Bernie Sanders Kill Trading As We Know It?

FTT's will never happen in US markets. They have been proven to adversely effect market quality and the decision makers understand this.

 

Thats right Fon, FTT has been tried in other countries, hugely lowers tax revenue and massively increases volatility. But unfortunately I don't have the faith you do in the intelligence of A/ voters B/ politicians.

Most people think Wall Street = Bad because they watched the Big Short and know what CDS stands for

 

Yes, great point. Capital gravitates to the lowest cost regime. A FTT will result in massive capital outflows to jurisdictions that do not have one.

 

I think it is very important we in the industry support lobby groups like the (Securities Trading Association) STA to represent our views and our interests with the SEC and Congress.

https://securitytraders.org

 

Then again, thanks to Odumbo's unprecedented use of executive orders to bypass Congress and our Constitutional legal process, Bernie may attempt to install FTT by executive order.

So long as Congress, SCOTUS, and the DOJ let the president get away with legislation via fiat, any tyranny is possible.

I say "F' your executive orders"!!

 

There are surely workarounds if it was implemented? Thankfully i believe the capital markets are bigger than a few crack pot socialists.

I don't think US stock futures could relocate (unless CME bought up a non US exchange) as they own all the IP/Copyright on Dow Jones, S&P etc so would have a real issue making them able to be hedged with US underlying stocks. But I think all the commodity and FX futures trading will leave the US for EU/ Asia exchanges.

 

A tax on securities should not effect futures.

 

As i understand it the tax is on all exchange based instruments and securities. This would include futures and options also.

It will be a 0.01% tax on the face value. So a 1 lot bond future that has a face value of $100,000 would have an additional $10 on every futures trade.

 

I agree with you that the financial transaction tax is a bad idea and vilifying Wall Street is unproductive and wrong.

But there is a place for the government to regulate the financial industry. El Arian had a nice interview on Bloomberg radio where he discussed the failure of capitalism's evolution: first it was an agrarian economy, then industrial, then service, then information, now finance. And the finance level has proven to not work. The government should create incentives to unwind this. The smartest kids out of school go to finance. It's changing now. 50 years ago they went into aerospace and automotive.

As a nation our competitive edge is being lost because the smartest guys are playing a form of video poker all day long.

 

Who cares about day traders? They mean no harm to the markets. They are hard working ants who provide liquidity to the markets and taxable income to the brokers. It's not up to Sanders to say who is a true investor and who is not based on their positions holding time. Day traders should be left alone to churn away the financial capitals. They are respected market participants. These are economic uncertainties that drive volatility up not day traders.