[vienna]

This is probably OT...just came back from London, and saw news there that both Sarkozy and Merkel just agreed on a Financial Transaction Tax.They will meet in September to make a resolution on it. Christine Laguarde, the head of the IMF, is also a big proponent....seems the writing is on the wall...Given the fact that the US (Clinton and Obama) so far argumented against a "unilateral" FTT, but might change their tack now that it might not be unilateral:

What is your guys strategy to deal with it, should it occur? The numbers thrown around (.005 on the value of the contract) equal a $200 tax per lot per roundtrip ES, which would make at least the advanced method obsolete (not even the masters could slalom in and out with such a heavy toll on each turn)....

So- question to the experienced hands here- what would you do (markets, timeframes)?

Thanks, Vienna

[Corey]

Originally Posted by vienna »

This is probably OT...just came back from London, and saw news there that both Sarkozy and Merkel just agreed on a Financial Transaction Tax.They will meet in September to make a resolution on it. Christine Laguarde, the head of the IMF, is also a big proponent....seems the writing is on the wall...Given the fact that the US (Clinton and Obama) so far argumented against a "unilateral" FTT, but might change their tack now that it might not be unilateral:

What is your guys strategy to deal with it, should it occur? The numbers thrown around (.005 on the value of the contract) equal a $200 tax per lot per roundtrip ES, which would make at least the advanced method obsolete (not even the masters could slalom in and out with such a heavy toll on each turn)....

So- question to the experienced hands here- what would you do (markets, timeframes)?

Thanks, Vienna

I think that is to combat HFT only, they will exclude us retail traders since 95% does not make money so taxing or not nothing to be gained from it.

[Tradewinds]

Whatever they do, if they kill the ability or incentive for traders to make money, then it will hurt liquidity. From there it's just a down hill spiral. Taxing the trade is pathetically stupid. Tax end of year personal income, but don't increase fees on each trade.

[Tams]

Originally Posted by vienna »

This is probably OT...just came back from London, and saw news there that both Sarkozy and Merkel just agreed on a Financial Transaction Tax.They will meet in September to make a resolution on it. Christine Laguarde, the head of the IMF, is also a big proponent....seems the writing is on the wall...Given the fact that the US (Clinton and Obama) so far argumented against a "unilateral" FTT, but might change their tack now that it might not be unilateral:

What is your guys strategy to deal with it, should it occur? The numbers thrown around (.005 on the value of the contract) equal a $200 tax per lot per roundtrip ES, which would make at least the advanced method obsolete (not even the masters could slalom in and out with such a heavy toll on each turn)....

So- question to the experienced hands here- what would you do (markets, timeframes)?

Thanks, Vienna

Hong Kong has been levying FFT for the longest time,
it did not dent the market a bit.

The number you quote is for equities,
futures would cost a lot less.

if and when it happens, just deal with it and go on. This is just another expense, no difference from CME charging another buck for quotes, or your ISP charging another dollar for internet... just be happy that the market is providing you with an opportunity to pay.

[Corey]

Originally Posted by Tams »

.. This is just another expense, ...

You would make a fine politician

[friva]

hi vienna,
good question.
I think a FTT has more than 50-50 chances to come.
Even a R President in the US might want this.
Sarkozy and Merkel are both right wing after all (or so their label reads).
The UK said they won't go for it unless the tax is globally charged. That is not a NO.
Italy almost passed a 0,15% stamp duty tax on equity/ETF/index futures trading earlier this summer.
The Belgian Parliament already approved a FTT, if I remember well 3 years ago, that was meant to automatically become effective as soon a FTT was "globally" approved.
I am sure many other countries are ready to join: you can always count on politicians being even impatient to do stupid things.

So I think it's unwise not to get prepared.

If a FTT is passed I guess one can:
1) trade Contract For Differences or Spread Betting;
2) trade where replica contracts will be launched.

I know nothing about (1) and on TL I found close to nothing.
Can anybody recommend:
a) the best CFD broker in his/her view ?
b) any other valuable source of info on CFDs (eg: reliable historical data on the width of bid/ask spreads) ?


When it comes to (2) it's almost certain that some country will reject a FTT.
Some of them (Dubai?) will probably launch replica futures contracts.
Having said that tax payers might be asked to pay a FTT to their tax authorities irrespective of where the trades are effected.
If you are happy to report fine, but if you are not it is good if the broker you use manages accounts/servers outside of where you pay taxes.
Eg: IB holds european customers money in London. As far as I know it executes orders via its servers in Switzerland. This means that all non-British (and non-Swiss) customers can feel almost 100% safe that IB will not be asked to report their trades to the relevant tax authorities or whether they moved funds offshore.

Any other idea ?

Best

F

[vienna]

Originally Posted by Tams »

The number you quote is for equities,
futures would cost a lot less.

if and when it happens, just deal with it and go on. This is just another expense, no difference from CME charging another buck for quotes, or your ISP charging another dollar for internet... just be happy that the market is providing you with an opportunity to pay.

I think you are wrong:
0.1% of TRANSACTION VALUE means:

130k eur x 0.1% = 130 eur for buy and 130 for sell.
total 260 eur. or over 10 dax points, or 4 ES points.

If it were just a small fee, of course, you would be right...no course of concern at all.

[MightyMouse]

Originally Posted by vienna »

I think you are wrong:
0.1% of TRANSACTION VALUE means:

130k eur x 0.1% = 130 eur for buy and 130 for sell.
total 260 eur. or over 10 dax points, or 4 ES points.

If it were just a small fee, of course, you would be right...no course of concern at all.

If they did that, liquidity would vaporize. Spreads would be HUGE to reflect the cost.