Can a /biz/nessman explain to me how Bernie Sander's proposed

>>1048240
It eliminates an entire industry.

No more high frequency trading. Which is good, because most of it is just bullshit anyways.

>>1048241
Can you give me the details?

>>1048240

Wont drive away investment, but will make trades more serious for a short while until loophole.exe is executed by smart money.

>>1048240
It will drive capital back toward tangible investments in industry and infrastructure, and away from this pointless shuffling game on the stock market.

It will get rid of the disgusting bullshit that is high frequency trading

I'm a trump person, i dislike Bernie's financial policies but the tax on stock transactions is really amazing.

High frequency trading stabilizes prices and adds liquidity to the market, there is literally nothing wrong with it. Suppressing it will only hurt the economy making it more difficult for good wholesome salt of the earth hard working Americans to save and put money into pensions, college funds and invest a little into the American dream. Bernie Sanders is a godless commie and this is just his way of making everyone a little more dependent on the state, which is apparently the basis for his "democratic socialist" utopia.

>>1048252
arbitrage capitalization is not pointless. It just seems that way to people who dont understand rudimentary fiance.

>>1048259
Except when people like me ask people like you to explain why we need it, the only answer is
>m-muh liquidity
And when pressed further
>y-you're just jealous

>>1048240
What game?

>>1048255
>Disgusting bullshit

You are one dumb nigger. High frequency trading injects needed liquidity. Just wait until Bernie implements this and you can't sell your shitty penny stocks anymore.

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>>1048327
>b-but muh liquidity!!!
Cry me a river, faggot. All it does is hurt cancerous speculators like you.

>>1048327
> muh liquidity

Seriously, shut the fuck up. HFT has not been around that long. It is a leech.

>>1048335
>>1048331
You NEET cûck faggots really need to kill yourselves

>>1048331
>>1048335

I shall invest in chemotherapy companies to get rid of the cancer that is you

>>1048337
>y-you're just jealous
Kek, you retards are so predictable

>>1048318
the basic gist of it is that our economic system is theoretical. And it makes certain assumptions that the real world cannot always abide by

in theory the market prices of securities will reflect their value. In practice there may be circumstances that (due to some for of inefficiency, for instance: asymmetrical information between two trading parties) cause pricing 'bugs' where the price of the security does not match its value.

If someone were to capitalize on this, they would stand to achieve near risk-less gain. (for instance fractions of a penny differences in pricing over an arbitrary amount of trades would yield significant profit.

So, from an outside perspective, it would seem that someone had simply bought and sold a bunch of securities rapidly and made "free" money from doing nothing. But actually such activity is good for all traders as a whole, because these inefficiencies are not conducive to a healthy market. arbitrage actors to capitalize on these discrepancies as soon as they are found. And thus the market evolved its own natural response to a fairly unsolvable problem.

Its kinda like a human body scabbing over a cut.

Sure it looks gross, and feels weird. but its actually better than the alternative: allowing an open wound to potentially fester and get worse

>>1048258
>High frequency trading stabilizes prices
kek

The funny thins is that Bernie himself probably knows less about the affects of his idea than OP who's asking the question.

>>1048343
Don't waste your time educating Sanders cucks.

>>1048343
Imagine a large corporate entity stomping on the face of your average retail investor, repeatedly.

That's HFT.

>>1048258
I don't like Sanders either but the only people making money on HFT are parasytic big banks. They create no value, just siphon funds away from investors like you and me.

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>>1048258
>High frequency trading stabilizes

You can't be serious.

>>1048369
>>1048404
Agreed

A lot of people don't realize that HFT basically acts as a front-runner to mutual funds and retail investors

what they do is extremely fucking shady

>>1048244
It's pretty simple.
The plan is to tax the value (not profit) of every trade half a cent every dollar, both on the buy and the sell.
So, you buy $10,000 worth of stock and then sell it, you'd be taxed $100 ($50 each way). That's even if you break even or lose on the trade.
It probably goes without saying that no traders would play by these rules, so if it ever passed, we'd end up with some screwy system like the UK, where people trade CFD's instead of stock in order to dodge taxes.

This idea actually initiated in 1972 as the "Tobin tax", after the Nobel prize who first enunciated the idea of taxing financial flows.

Of course, a whole lot of people hate the idea. But if one claims than financial trading creates value in an economy, then taxing it is just a matter of common sense. Economical activities are taxed, that's how nations finance themselves, Economics101. Of course there would be loopholes, but even so, it would generate tremendous revenue.

>>1048240
Average daily trade volume in US equities markets is ~9 billion shares.

Including that he would almost assuredly want to tax all activity in futures and options as well would probably bring it closer to ~12 billion transactions per day on average.

That's 6 billion dollars in cost-added-only fees daily, or about 1.5 trillion in annual cost.

Additionally a flat 50 cent tax would adversely affect small stocks, so every company would seek to reverse split to reduce the transaction cost, and make their shares too expensive for median income individual investors, forcing them to seek out funds which add additional costs.

Long story short: the markets would move out of the country and the ability to raise capital would be severely impaired, and we'd get to know what it's like to be eastern europe.

>>1048240
It's good for making small-time daytraders on welfare AKA dependency on the government

>>1049153
>taxing it is just a matter of common sense
Oh, I get it. So profits from stock aren't already taxed? Oh wait, they are?

Then what the fuck are you talking about?

>>1048343

The value of arbitrage is all about time scale. Regular markets produce a representative picture of the value of assets via arbitrage, which is a valuable service. The thing is that on the 10 millisecond time scale and hundredths of a cent that hft operates on, there is little to no value in that arbitrage to the larger market. It just pulls out money from the market little by little. That money comes largely from investors like us who don't have the resources to do the same thing.

You'll find stocks sometimes whose graphs look like square waves on the minute scale. That's because there are hft bots fighting a battle and that stock just happens to be the battleground. It doesn't do anything but destabilize the stock for real investors and sap a few cents out of them every time they trade the stock by jacking up the price right before the order goes through and then selling again

>>1048240
I see like most of Sanders' ideas, this one's controversial. I'll take a swing at it.

What this will do is make it costly to engage in speculative stock trading without impacting investment stock trading. If you're buying shares in apple because you think it's a great company that will do well in the future, 50 cents extra to buy the shares won't dissuade you. If you're buying it because you think it will be worth more by the end of the day, 50 cents might make it less worth your while. If you're buying it because you think it will be worth more a few seconds from now, 50 cents will almost definitely make it not worth your while.

I'd be for it because I think high frequency trading (which often takes place several times a second) doesn't do much beyond further concentrating wealth. liquidity might suffer, but volatility would probably also be reduced.

TL;DR: Investors won't be affected, but speculators will.

>>1048335
how is it a leech? is it better or worse than the old system?

you wouldn't have penny pricing (not to mention spreads), cheap/free online trading, etc. without hft

>>1048468

>DEFINITION of 'Front Running'

>The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients have been given the information.

explain to me where hft does this

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>>1048240
Like any other tax increase. People move elsewhere. Happened in states when they added online poker restrictions. The pros who were making real money simply moved to canada etc. It's really easy. It's his economy's loss.

Taxes drive wealth away. Look at france. It's a mess as all the wealth flees like hell. Politicans dont understand it's free market. Money and people will move to better conditions. Usa has been a good place as they had lower taxes than europe, attracting european talent and companies to move abroad.

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50cents is so little it's just a hft tax basically. I guess sanders dont like hft. That's fine, but he will never beat the banks in any game, he should know.

>>1049951

>those face lines

Damn she is aging hard. Im older and I live a rock and roll lifestyle and I dont have that shit.

>>1049913
It's not "50 cents".
It's .5% of the value of the entire trade, making it potentially unlimited.

>>1049951
Can't argue with that. I have two kids and no need to work. Currently, I pay thousands annually to my broker for margin interest and commissions due to trading activity. This is in addition to thousands in tax to the Feds and state.
I would have pretty much zero reason to keep trading if this were to pass, and so I wouldn't.
Kind of goes against the idea of creating additional revenue, but whatever.

>>1049951
Good luck taking the nyse with you

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ohh it's 50cents for 100usd? LOL ok that wont work

>>1048603
cfds you will pay capital gains tax normally. losses you can deduct of your income, that's handy. spread betting you avoid taxes.

btw cfds are banned in states (LOL??) what the fuck

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>everyone so fucking buttfrustrated about Wall Street

Current downturn aside, the market is quite honestly soaring and I suspect you're mad because you're either too stupid to understand it, or too poor to invest.

>>1049973
>cfds you will pay capital gains tax normally
Right, but if you traded equities you'd get fucked on Stamp Duty.
From what I understand, that's half of what Sanders wants here - your .5% (SDRT) is only on the buy, not the sale.