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Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

wallstreetpit.com

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Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#11

Post by davi »

Aetius wrote: post #9
davi wrote: post #7

Earlier quoted context omitted.

Did you read the article? The proposal seems reasonable to me, much more so than your comment gives it credit for: a small per-share transaction fee which could be fed into "an annual payment towards the next time Wall Street screws up and we have a black swan event that no one planned on". It's just an inflammatory, link-bait headline (which maybe I should edit). ----- edit: I changed the title from its original, "M…

Not only is the title link-bait. The plan is pure red meat. We all know that it's not just financial engineering responsible for the crisis. It wasn't just Wall Street. Wall Street just happens to be Washington's latest political scapegoat. What I'm saying is beware when their attention turns westward.

Adding a little bit of friction to vast, interconnected networks of automated high speed trades doesn't seem like the worst thing in the world to me. It seems like it might dampen otherwise wildly oscillatory behavior from the system.

Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#12

Post by AKSHAYUDAYBHAT »

Actually there is a share trading tax in India it is equal to 2 percentage points of the value that is 0.02% of the value this makes sure that if anyone is going to do HFT there margin is at least bigger than 0.02% Learn more here : http://www.smartmoneyindia.co.cc/2009/01/all-about-securitie... (not my link)

Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#14

Post by ianferrel »

A per-share tax makes no sense, because a share is an arbitrary measurement. This would effectively be a regressive tax on small-time investors.

As Cuban himself mentions, it would put pressure on companies to do reverse splits. But I believe he underestimates how much pressure. You'd see stratification, with most companies issuing the A-class big investor shares with prices in the $10s of thousands ($100s?) and B-class cheap shares.

Middle class people buying small amounts of cheap shares in retirement plans would pay the bulk of this tax.

Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#15

Post by yummyfajitas »

davi wrote: post #11
Aetius wrote: post #9

Earlier quoted context omitted.

Not only is the title link-bait. The plan is pure red meat. We all know that it's not just financial engineering responsible for the crisis. It wasn't just Wall Street. Wall Street just happens to be Washington's latest political scapegoat. What I'm saying is beware when their attention turns westward.

Adding a little bit of friction to vast, interconnected networks of automated high speed trades doesn't seem like the worst thing in the world to me. It seems like it might dampen otherwise wildly oscillatory behavior from the system.

Why do you feel that raising the bid/ask spread to $0.25 will prevent wildly oscillatory behavior?

If anything, it will probably increase strange behavior. If you want to buy shares, you'll either need to pay a largish premium or else you'll need to wait a while. Fun fact: for the most part, prices have stabilized and spreads have narrowed as HFT has entered the game.

Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#16

Post by AKSHAYUDAYBHAT »

davi wrote: post #11
Aetius wrote: post #9

Earlier quoted context omitted.

Not only is the title link-bait. The plan is pure red meat. We all know that it's not just financial engineering responsible for the crisis. It wasn't just Wall Street. Wall Street just happens to be Washington's latest political scapegoat. What I'm saying is beware when their attention turns westward.

Adding a little bit of friction to vast, interconnected networks of automated high speed trades doesn't seem like the worst thing in the world to me. It seems like it might dampen otherwise wildly oscillatory behavior from the system.

Yes it would mostly dampen, but in certain case the systems might go out of control. Since no one know what are the parts of the systems its very hard to predict.

Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#18

Post by kqr2 »

ianferrel wrote: post #14

A per-share tax makes no sense, because a share is an arbitrary measurement. This would effectively be a regressive tax on small-time investors. As Cuban himself mentions, it would put pressure on companies to do reverse splits. But I believe he underestimates how much pressure. You'd see stratification, with most companies issuing the A-class big investor shares with prices in the $10s of thousands ($100s?) and B-cl…

You could limit this tax to short term trades so it wouldn't penalize long term buy and hold investors.

Re: Mark Cuban: place a 25 cent-per-share transaction fee on Wall St. trades

#20

Post by _delirium »

yummyfajitas wrote: post #15
davi wrote: post #11

Earlier quoted context omitted.

Adding a little bit of friction to vast, interconnected networks of automated high speed trades doesn't seem like the worst thing in the world to me. It seems like it might dampen otherwise wildly oscillatory behavior from the system.

Why do you feel that raising the bid/ask spread to $0.25 will prevent wildly oscillatory behavior? If anything, it will probably increase strange behavior. If you want to buy shares, you'll either need to pay a largish premium or else you'll need to wait a while. Fun fact: for the most part, prices have stabilized and spreads have narrowed as HFT has entered the game.

If everyone, even the huge institutional players, has to deal with non-zero bid/ask spreads, it does reduce incentive to spend a lot of effort exploiting tiny arbitrage opportunities with huge-volume trades, which could stabilize things overall. Admittedly, it's something economists disagree on.
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