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Or, implement Mark Cuban's 10 US cents per trade cost idea. http://news.ycombinator.com/item?id=2862003 http://news.ycombinator.com/item?id=2862003 No more pro

Or, implement Mark Cuban's 10 US cents per trade cost idea. http://news.ycombinator.com/item?id=2862003 http://news.ycombinator.com/item?id=2862003 No more problem. And it could be harder to game than taxing profits after the fact...

superprime 14y ago
It's not really his idea, but it's probably a good one. I remembered it as being called a Tobin tax, but that really only applies to currency exchange. Instead, it's just a securities transaction tax: http://en.wikipedia.org/wiki/Financial_transaction_tax#Securities_transaction_tax http://en.wikipedia.org/wiki/Financial_transaction_tax#Secur... .
NelsonMinar 14y ago
The European Union is seriously considering adding a 0.1% tax against trades in stocks and bonds (and an 0.01% tax on derivatives). It would definitely curb HFT, and there's talk of it also generating needed revenue. The main criticism is that a transaction tax distorts the market in hard to predict ways, and that big players may work around it. The English Wikipedia article has a decent summary of the proposal status: http://en.wikipedia.org/wiki/European_Union_financial_transaction_tax http://en.wikipedia.org/wiki/European_Union_financial_transa...
- taw9 14y ago
  That will just kill liquidity and bias the market further towards larger agents. EU is going to shit anyways, so I'm all for it. Fug Capitalism. Viva 99%. (sarcasm intended)
taw9 14y ago
It would also kill liquidity, which means next time we go into a recession and you hit the panic button on your 401k, I won't have a resting bid to catch you. The problem isn't HFT, but rather dumb investors (like your pension fund) and bad vehicles (like leveraged ETFs and volatility-linked equity). Getting a good price is about subtle presentation of intent. If you're not willing to be subtle, you get what you deserve. Generally, pension funds choose the path of least intelligence and actually believe the sell side. As for individual investors, if you don't know the difference between a market order and a limit order, you shouldn't be allowed to trade. Better yet, exchanges shouldn't allow market orders. Soros wants the Tobin tax too... that alone should be a big red flag. The general public seems to think that regulations are written by "the people". Bullshit. They're written for "the people" by GS, JPM, etc... corporate lawyers will craft whatever implementation we get stuck with. Caveat trado!
rdm70 14y ago
Unintended consequences alert: read up on the UK stamp duty on UK equity trades. Goldman Sachs creates a derivative security matching the return of the underlying equity that you can trade with GS and avoid paying the stamp duty. Net result: GS makes money, less liquidity for the average investor. Rock on transaction taxes.
- moe 14y ago
  Goldman Sachs creates a derivative security matching the return of the underlying equity So Goldman Sachs is using a loophole, how surprising. What is your point, though? Should we not make laws that can potentially have loopholes?

superprime 14y ago

It's not really his idea, but it's probably a good one. I remembered it as being called a Tobin tax, but that really only applies to currency exchange. Instead, it's just a securities transaction tax: http://en.wikipedia.org/wiki/Financial_transaction_tax#Securities_transaction_tax http://en.wikipedia.org/wiki/Financial_transaction_tax#Secur... .

NelsonMinar 14y ago

The European Union is seriously considering adding a 0.1% tax against trades in stocks and bonds (and an 0.01% tax on derivatives). It would definitely curb HFT, and there's talk of it also generating needed revenue. The main criticism is that a transaction tax distorts the market in hard to predict ways, and that big players may work around it. The English Wikipedia article has a decent summary of the proposal status: http://en.wikipedia.org/wiki/European_Union_financial_transaction_tax http://en.wikipedia.org/wiki/European_Union_financial_transa...

taw9 14y ago
That will just kill liquidity and bias the market further towards larger agents. EU is going to shit anyways, so I'm all for it. Fug Capitalism. Viva 99%. (sarcasm intended)

taw9 14y ago

It would also kill liquidity, which means next time we go into a recession and you hit the panic button on your 401k, I won't have a resting bid to catch you. The problem isn't HFT, but rather dumb investors (like your pension fund) and bad vehicles (like leveraged ETFs and volatility-linked equity). Getting a good price is about subtle presentation of intent. If you're not willing to be subtle, you get what you deserve. Generally, pension funds choose the path of least intelligence and actually believe the sell side. As for individual investors, if you don't know the difference between a market order and a limit order, you shouldn't be allowed to trade. Better yet, exchanges shouldn't allow market orders. Soros wants the Tobin tax too... that alone should be a big red flag. The general public seems to think that regulations are written by "the people". Bullshit. They're written for "the people" by GS, JPM, etc... corporate lawyers will craft whatever implementation we get stuck with. Caveat trado!

rdm70 14y ago

Unintended consequences alert: read up on the UK stamp duty on UK equity trades. Goldman Sachs creates a derivative security matching the return of the underlying equity that you can trade with GS and avoid paying the stamp duty. Net result: GS makes money, less liquidity for the average investor. Rock on transaction taxes.

moe 14y ago
Goldman Sachs creates a derivative security matching the return of the underlying equity So Goldman Sachs is using a loophole, how surprising. What is your point, though? Should we not make laws that can potentially have loopholes?