This is worse than a transaction tax. Already passed but not in effect to 2021. Financial Armageddon for German Traders.

https://financial-hacker.com/the-scholz-brake-fixing-germanys-new-1000-trader-tax/

SMCJB 

This is worse than a transaction tax. Already passed but not in effect to 2021. Financial Armageddon for German Traders. https://financial-hacker.com/the-scholz-brake-fixing-germanys-new-1000-trader-tax/

indeed there were already multiple threads going crazy about it on elitetrader.

too many ppl saying that our fears of FTT are overblown when it's just not true.

if you think the US is an exception since we're different from those "socialist Euro-cucks", it only takes the presidency and the senate to turn blue this november for something like this to happen state-side, since the democrats have free reign to pass whatever legislation they want once they have control of both the house and senate + presidency.

Since there are new discussions about FTT, I would like to understand exactly what is coming up.

What does it actually mean when people demand that there should be a tax of 0.01% on derivatives?

I do short-term trading in the FDAX. My instructor always said that on average you should have at least 3 points per trade.

Let's say I buy 1 contract FDAX and sell 3 points higher - that is 75 € gross.

minus fee 2,40 € fee
minus 0.01% tax from what? 13.300 x 25€ ? That means 33,25 € ?
--------------------------------------
35,60 € intotal
That means: The first 1.5 points !that is 50%! are costs and taxes?

Willbur 

Since there are new discussions about FTT, I would like to understand exactly what is coming up. What does it actually mean when people demand that there should be a tax of 0.01% on derivatives? I do short-term trading in the FDAX. My instructor always said that on average you should have at least 3 points per trade. Let's say I buy 1 contract FDAX and sell 3 points higher - that is 75 € gross. minus fee 2,40 € fee minus 0.01% tax from what? 13.300 x 25€ ? That means 33,25 € ? -------------------------------------- 35,60 € intotal That means: The first 1.5 points !that is 50%! are costs and taxes?

it's 0.01% of the notional value of the contract. and importantly, it's applied per-transaction.

to take your example, FDAX's current notional value is 326125 euros for 1 contract.

0.01% is 32.61 euros.

since FTT is applied per transaction, the 0.01% FTT is applied for both opening and closing transaction.

so opening and closing 1 FDAX futures contract will incur 65.22 euros in FTT + commissions + fees...so around 70 euros.

that's why ppl say that FTT is basically a death sentence for daytraders b/c it'll render it obsolete. remember even after subtracting FTT + commissions + fees, if you still manage to eke out a profit, you get taxed 30-50% of that profit through capital gains tax depending on your country's tax laws. even for swing traders, it's a big ass burden.

you Europeans, especially Germans after their latest tax change, need to get your heads out of your asses and realize how badly you're getting fucked in the name of "social democracy." especially since FTT legislation released so far all seem to provide exceptions for market makers. so basically prop/hedge funds like Citadel get to evade FTT while the rest of us plebs are screwed over.

Willbur 

Since there are new discussions about FTT, I would like to understand exactly what is coming up. What does it actually mean when people demand that there should be a tax of 0.01% on derivatives? I do short-term trading in the FDAX. My instructor always said that on average you should have at least 3 points per trade. Let's say I buy 1 contract FDAX and sell 3 points higher - that is 75 € gross. minus fee 2,40 € fee minus 0.01% tax from what? 13.300 x 25€ ? That means 33,25 € ? -------------------------------------- 35,60 € intotal That means: The first 1.5 points !that is 50%! are costs and taxes?

the 0.01 % tax is an old hat, you just have to click the first link on page 5 of this thread and you will be surprised I never saw such a stupid idea

The EU are not going to let this go ... nutters.
Watch all the activity move to London (or Asia) ... The UK will be glad they are out of the EU.

https://www.cityam.com/angela-merkel-seeks-to-impose-financial-transactions-tax-on-eu-countries/

steve2222 

The EU are not going to let this go ... nutters. Watch all the activity move to London (or Asia) ... The UK will be glad they are out of the EU. https://www.cityam.com/angela-merkel-seeks-to-impose-financial-transactions-tax-on-eu-countries/

If this happened in the US, what would the options be for US traders?

From what I've seen the tax still applies to US citizens abroad.

So would that mean that we'd have to become a Canadian or UK citizen and relocate and trade on those exchanges?

Just reading the Wall Street Journal and their discussion on What Kamala Harris Means for Wall Street and Silicon Valley

Wall Street is happy about the signal it sends. Ms. Harris was the moderate choice among more left-leaning candidates who may have taken a tougher line on finance firms. That said, during her presidential primary campaign, Ms. Harris said that she would pay for her health care plans with taxes on financial transactions: “I would tax Wall Street stock trades at 0.2 percent, bond trades at 0.1 percent, and derivative transactions at 0.002 percent.” Mr. Biden has expressed some support for the idea of those taxes, but not as explicitly as his running mate.

.002 percent on
@ES at 3372 would be $6.74 (hence $0.67 on MES)
@CL at 42.60 would be $0.85
@GC at 1940 would be $3.88
@GE at any price would be $20
@BTC at 11650 would be $1.16

SMCJB 

Just reading the Wall Street Journal and their discussion on What Kamala Harris Means for Wall Street and Silicon Valley Wall Street is happy about the signal it sends. Ms. Harris was the moderate choice among more left-leaning candidates who may have taken a tougher line on finance firms. That said, during her presidential primary campaign, Ms. Harris said that she would pay for her health care plans with taxes on financial transactions: “I would tax Wall Street stock trades at 0.2 percent, bond trades at 0.1 percent, and derivative transactions at 0.002 percent.” Mr. Biden has expressed some support for the idea of those taxes, but not as explicitly as his running mate. .002 percent on @ES at 3372 would be $6.74 (hence $0.67 on MES) @CL at 42.60 would be $0.85 @GC at 1940 would be $3.88 @GE at any price would be $20 @BTC at 11650 would be $1.16

That's VERY moderate compared to the transaction tax which is (planned) to be imposed on any derivatives in Germany starting from 2021....

I'd immediately subscribe to this.

SMCJB 

Just reading the Wall Street Journal and their discussion on What Kamala Harris Means for Wall Street and Silicon Valley Wall Street is happy about the signal it sends. Ms. Harris was the moderate choice among more left-leaning candidates who may have taken a tougher line on finance firms. That said, during her presidential primary campaign, Ms. Harris said that she would pay for her health care plans with taxes on financial transactions: “I would tax Wall Street stock trades at 0.2 percent, bond trades at 0.1 percent, and derivative transactions at 0.002 percent.” Mr. Biden has expressed some support for the idea of those taxes, but not as explicitly as his running mate. .002 percent on @ES at 3372 would be $6.74 (hence $0.67 on MES) @CL at 42.60 would be $0.85 @GC at 1940 would be $3.88 @GE at any price would be $20 @BTC at 11650 would be $1.16

Thanks for sharing that.

I saw her 0.002% rate for derivatives and looked around at other proposals both domestically and internationally and some of them are so onerous that they would shut us down completely.

If we had to have an FTT I could live with this, however I'd be concerned about it going up in the future.

The extent of the cascade affect of destroying short term trading would be difficult to predict. The first thing I'd imagine would be huge spreads and a large increase in volatility due to the sudden lack of participants.

If it were up to me, I'd assume that taxing gains would make more sense, in particular perhaps a change to section 1256 would be more reasonable. If the FTT goes too high, their forecasted tax revenue had better account for a severe drop off in trading volumes. At least reform to 1256 would not hinder participation/liquidity etc.