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To: BobL

This is funny stuff.

Why is it that people like you (and many others) on this thread feel compelled to spout off about things that you know nothing of and don’t understand at all?

High frequency trading (I’ll call it “HFT”) has ZERO effect on investors. An outfit doing HFT buys AND sells (or sells and buys) the same security in a matter of microseconds. So what?

Any HFT trade is a net zero — they bought and sold, or sold and bought — in a flash. No change in their net position. All they did was contribute liquidity to the market. If they’re happy making .001 or .0001 or .00001 or .000001 per share, more power to them.

Turns out that the profitability of those trades isn’t nearly what it used to be. Gosh, who’d a thunk it, there’s a lot less capital and effort devoted to it now than previously.

They can place orders to their heart’s content, all orders contribute to liquidity which wouldn’t otherwise be there.

It’s not a tax of any kind on anyone. An HFT trading operation is just another market participant and takes on risk just like anyone else does when a trade is made.

I, like most investors place my orders at a limit price. Someone else is either willing to sell it to me at that price or not. Or buy it from me, if I’m a seller. All that’s got exactly and absolutely nothing to do with HFT. Except to the extent that an HFT order might be on the other side of my order, which is fine with me or any other buyer or seller.

My orders (and all orders) are also executed in microseconds. Just like the HFT guys.

A ridiculous .25% tax on securities transactions wouldn’t just wipe out HFT, it would wipe out market makers (do you even know what they are or what they do?) and market liquidity in general.

That’s not a good thing. Not for you. Not for me. Not for anyone.

Instead of a typical .01 bid/ask spread on the average $70 Dow Jones Industrials stock, the spread would turn into 20 cents or so, enough to cover the .25% tax. With a lot fewer shares bid or offered on each side. When I say a lot fewer, I mean 90% fewer. Or worse.

I guess very thin, much more volatile markets are OK with you. You seem to think that securities still trade in 1/8th point (12.5 cent) increments. And that it’s OK to severely impair liquidity and drive most trading off-shore, which is what would happen.

Not to mention that 100% of this goofy tax would be entirely paid (to the extent anyone pays it at all) by the U.S. retail public. Do you also want to return to the days of fixed commission rates?

I pay no more than 1 cent per share to buy or sell (which is actually very high, I’m just a retail investor with a mid 6-figure account.) That’s down from 100 times that back in the fixed commission rate days of the ‘60s. If I wanted to trade more frequently, I could easily trade for .1 to .2 cents per share. Or less.

It’s unfortunate that you and others on this thread don’t know how markets actually operate and then sound like so many socialists when it comes to Wall Street.

Tax ‘em! As if any such .25% transaction tax wouldn’t be paid but by a very few U.S. consumers. Wall Street only pays taxes on their net income. And “Wall Street” would shortly be located elsewhere in the world.

This is not to say that I have a problem with Trump. He may know zero about economics and doesn’t really expect that any of his goofy tax/tariff/economic proposals will be enacted — maybe 10% of what he suggests, which would be bad enough — but I’d gladly vote for him over any commie/socialist Democrat (which is all of them.)

Ted would be better, but I’ll happily take them in any combination.


77 posted on 01/10/2016 1:48:18 PM PST by AntiScumbag
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To: AntiScumbag

Well I’m even MORE FIRED UP about Trump’s position as I just came back from watching The Big Short, which was ENTIRE ACCURATE, as I lived through it, to the point of also looking up loans in Florida in that time frame (they were posted on the web, at least from one county, at that time).

I WILL NEVER DEFEND WALL STREET!

...and it is happening again, just watch.


80 posted on 01/10/2016 5:11:46 PM PST by BobL (Who cares? He's going to build a wall and stop this invasion.)
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