My understanding is they put buckets out in front of barber shops for example, and you bet on whether market went up or down, or sugar up or down, or particular stock up or down. I understand, the CMA had to specifically pre-empt state laws against bucket shops so that derivatives could be used.
I think what it boils down to is what is the function of the markets? Another example. say A group of 20 people own the Dallas Cowboys. Every week, 2 or 3 of them sell out and 2 or 3 different ones buy in.
Is that good for keeping control over management or the coaches? I would suggest you start to get a disconnect thing going on and the effect is, 2 or 3 stable owners end up running whole shebang. Is that good for the organization or will the 2or 3 kinda run t for themselves.
If they do, the 2 or 3 might like the price to fall so they can buy up shares cheaper...
parsy
But it also comes down to the property rights of the owners. If an owner want to buy an interest in the Dallas Cowboys on Monday and sell it on Tuesday, he or she should be able to do so unless there is a clause in his sales contract that says he must hold on to the investment for several weeks.
T.Rowe Price put a sliding scale or backend load on its High Yield Bond fund some years ago. The interest rates were high compared to money market accouts and people were using this mutual fund as a highy yield checking accout.
But it was done by a private firm not a government tax.