I suspect that POS software vendors will make billions of pennies selling upgrades.
Canada ditches the penny
51–60 of 120 posts
Re: Canada ditches the penny
#52Does that mean pricing psychology would work differently? 19.99 would be out of fashion?
Re: Canada ditches the penny
#53Earlier quoted context omitted.
Because it gave an advantage to market makers and large institutional traders. I can look for some of the research if you are interested... This is from the SEC at the time: http://www.sec.gov/news/testimony/ts092000.htm It should be a good starting point if you are interested. There was also a NYT article that was very succinct but I can not find the citation at the moment. EDIT: I'm at a loss for why this was downv…
I still don't understand how that is a win for consumers . If anything, my limited experience with the stock market tells me that market makers and HFT have been stealing cents on most transactions made by individuals since we've made the switch.
Stealing is a bit of a loaded word. The HFT algos provide immense liquidity to the market by, well, executing tons of transactions every second. This means when you decide you want to purchase 100 shares of a stock, one of the automated machines will try and sell you those shares for a slightly increased price to make a profit. Now the guys doing HFT would love to increase the price by 10% to sell you those shares, but since every single HFT computer sees that buy order, they quickly scramble to try and fill it. As a result, they focus on making a penny or two per share but executing the transaction in microseconds. By lowering their per share profit they can guarantee they will get the trade since otherwise another market maker will step in and offer the shares a penny lower. By executing tons of transactions a second they can make money doing this since they focus on buying/selling a large volume every day.
Back when all trades were performed by people it would be very difficult to trade with high precision numbers, but since the market makers all work on an automated basis, penny precision increases the resolution an algorithm can decide on the price to buy/sell a share. Since the algorithms are focusing on low profit but high volume, they will lower their profit to try and win the trade against the other market makers.
Why is this good for you? Unless you're trading thousands of times a day, you will only pay a tiny premium to the HFT guys as it's a race to the bottom for them (aka the current share price). They are focusing on speed, and as a result they can't spike up the price suddenly as the other algorithms will jump and and take the trade from them. This is the liquidity they provide to the market and also why when you place your order through your broker it goes through in seconds. If the minimum resolution was fractions of a cent that would be the resolution the algorithms would work at, so instead of paying a $0.01 per share premium you're paying a $0.125 per share premium since that's the minimum they can go while still selling for a profit. Before automated trading a real person would have to go out on the trading floor and try and find you some shares to buy. I can guarantee that you would pay a higher premium per share doing that vs having computers race each other to fill the order in microseconds.
Note: I glossed over a lot of information here and tried to simplify it a lot. It should give you a good idea why HFT is good for the individual investor though.
Re: Canada ditches the penny
#54Earlier quoted context omitted.
Even better: the US used to have a half-cent but they abolished it in 1857 due to its lack of value. With inflation, it's worth more than today's dime.
Some would argue that your example is almost exactly as good as the other one given.
His example features actual abolition of an existing coin, not just deciding "well, this ought to be granular enough" when designing money.
Re: Canada ditches the penny
#55Does that mean pricing psychology would work differently? 19.99 would be out of fashion?
It will turn into 19.95 to keep the same psychology. Many stores already vary the last digit to mark the status of the item. Such as 97 for clearance items and so on.
Re: Canada ditches the penny
#56Re: Canada ditches the penny
#57Does that mean pricing psychology would work differently? 19.99 would be out of fashion?
[deleted]
Re: Canada ditches the penny
#58Earlier quoted context omitted.
from reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.
I was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not…
I've successfully written SR&ED applications myself for businesses certainly less deserving than Tarsnap. We decided the consultants were too expensive and gave it a shot ourselves. One solid week of work for one guy at a company of 10 people netted $30,000, definitely worth the time. All you need is a decent record of work done (I used both github commit log and a bug tracker.)
Unfortunately I expect you'll never get money from a bureaucrat without a little paperwork. Still, you're missing out if you don't even try.
Re: Canada ditches the penny
#59"And some old adages will likely fade away, too."
Australia hasn't had pennies since the sixties and we still use phrases like "in for a penny, in for a pound."
Re: Canada ditches the penny
#60Earlier quoted context omitted.
from reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.
I was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not…
While it is a big headache to trac, document work and formulate and application, it is most definitely worth it. I've been part of a team that has claimed small sr&ed pieces of work and managed to get back a substantial credit. I agree that there should be a more stringent vetting of applications as this is our tax payer money we're talking about.