[fallingfrog]

Why don’t we just levy a 5% tax on every stock trade? That would provide a lot of funding and also get rid of front running, flash crashes, and a lot of kinds of market manipulation in a hurry. It would also make sure that any stock trade was with the intent of making longer term investments.

[the_pwner224]

HFT and front running is a plague upon the markets, but there are already effective ways to stop it (order batching, and time delays like IEX does). The only reason it even exists is because the exchanges make tons of $$$ from selling access to the HFTs.

On the other hand, day traders provide valuable liquidity to the markets, making them more efficient and better for everyone. They ability to operate would be severely harmed with even a 1% fee on every trade. And more fees also harm normal people like me, who conduct trades that generally last from a few days to a few weeks each. For the most part, we're not harming other people, and we make the markets more efficient and legitimate.

The weird market effects are enabled by what is basically corruption by large entities involved with the markets, and by the ineffectiveness of the SEC at fighting a wide range of anticompetitive practices. They are caused by people who are making a small amount on every trade, but not all of the people making a small amount on every trade are bad.

[fallingfrog]

Personally I think that there is such a thing as too much liquidity, and we are at that point now. It certainly undercuts the power of the workers in a region if its that easy to pull money out, but the people can’t leave. So the holders of the capital have all kinds of leverage (they can pull their money out in a nanosecond) but the people have none (they are stuck where they are and must take what they can get).

[username223]

Even 0.1% would probably be enough to tamp down most HFT.

Unfortunately, this exchange doesn't seem to be aimed at that:

> The LTSE is a bid to build a stock exchange... that appeals to hot startups, particularly those that are money-losing...

> ... giving retail investors a chance to cash in on high-growth startups.

That sounds like a private lottery at best, and a scam at worst. Maybe it wouldn't seem so bad if I read through the full SEC document, but I'll steer clear of this until plenty of other people have tried it out.

[lostdog]

Or just add a category of capital gains--super short-term capital gains--for holding something for minutes or hours, and tax it at 50%.

[icelancer]

> 5% tax on every stock trade

I am not sure you've done the math on this when it comes to your basic person socking away $5000/year in index funds in a simple Roth IRA trying to save for retirement, and what signal it sends towards saving money / planning for the future, which is already at its lowest point in this country.

[rajacombinator]

Actually that accomplishes the opposite of what you’re saying and results in a more scammy market. Read about CFDs in UK.

[webninja]

A 1 penny tax would be very effective too without the subsequent damage to liquidity.

[platz]

Probably also kill the dollar as global reserve currency