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Liquidity is good for markets. Taxing every trade would reduce liquidity and increase transaction costs for all market participants. https://en.m.wikipedia.org
by quickthrowman 2y ago
Liquidity is good for markets. Taxing every trade would reduce liquidity and increase transaction costs for all market participants.
https://en.m.wikipedia.org/wiki/Market_liquidity https://en.m.wikipedia.org/wiki/Market_liquidity
- exe34 2y agoI think the idea is to make it unprofitable to do high frequency trading, but you could still do normal trading with the usual benefits.
- quickthrowman 2y agoHigh frequency traders provide liquidity—-making it unprofitable would reduce liquidity and increase the bid/ask spread of all stocks. What you propose would mean more profits for market makers and less profits for retail investors.
- exe34 2y agodo you know what the mechanism that would do that? I see a lot of these claims in economics/finance, but I don't see a lot of explanation of the why.