Tobin Taxes: Threat or opportunity for STIR locals?

[arabianights]

It is, I think, looking more and more likely that some kind of transaction tax will be introduced... and if it is then on the assumption it will be per lot and of a significance that would be felt by a typical market participant (and for this I think at least £10 a round trip and possibly considerably more) it will kill the usual ways locals trade, no doubt about it.

So is there an opportunity here, one wonders? I see two... price making with very wide spreads... and if this were to occur I think it could - perhaps - be a doddle, say 5 bid at 15 and split at 10, all day long. Alternatively, in the unlikely event the politicians have some idea what they were doing they may introduce a market making expemption... and in such a case I assume we'll be grandfathered in (I hope) and just have to fill out a lot of forms, but there will be no economical way of doing grad schemes in the future if that remains the case.

And how will this affect paper?

 

[Trader333]

Do you think that this would kill liquidity and as such reduce the number of trades available ?


Paul

 

[cuotes]

I read in other forum that Tobin Taxes could make the markets a bit more trendy.

:?:

 

[arabianights]

Do you think that this would kill liquidity and as such reduce the number of trades available ?


Paul

Depends on exactly what you mean by liquidity; the liquidity will be there but at much less favourable prices to whoever needs it.

There will also be much less trades available for sure; just check open interest on any serious futures contract to the daily volume...

 

[oiltanker]

Anyone welcome, especially locals, fund guys, brokers...

and robots...

 

[donaldduke]

You read too many news stories i think. Six months ago you were frightened into nearly fleeing the country by all the press hysteria related to Swine flu. Now its all the news stories about the Tobin tax thats probably keeping you awake at night.. Chill out mate, It aint going to happen.

 

[arabianights]

You read too many news stories i think. Six months ago you were frightened into nearly fleeing the country by all the press hysteria related to Swine flu. Now its all the news stories about the Tobin tax thats probably keeping you awake at night.. Chill out mate, It aint going to happen.

My reaction to swine flu was entirely reasonable with the facts and (lack of) expertise I had at the time, and I would do the same again.

As for tobin tax... it may or may not happen... but since it's not fantastically improbable surely makes some sense to start thinking about how it may affect the market in advance?

 

[BoarDome]

Dave I thought you got swine flu in the end?

 

[arabianights]

Yup, wasn't anything to speak of and frankly I only took time out because people weren't too impressed with my turning up to the office with it. But by that stage it obviously wasn't dangerous (in that form). The fact is at the time when one is approaching from a position of no expertise and no real time to get up to speed with the biology the best thing to do is watch what the experts are doing, and so far as I could ascertain they were very, very worried.

Not that this has anything remotely to do with a Tobin Tax.

 

[donaldduke]

Prime Minister Gordon Brown's idea of a financial transactions tax has received a lukewarm response from G20 countries.

http://news.bbc.co.uk/1/hi/uk/8348653.stm

US Treasury Secretary Timothy Geithner dismissed the idea of such a tax, saying: "That's not something that we're prepared to support."

 

[arabianights]

Yeah Geithner's response has cheered me a bit, but once again my paranoid fears are proven to have some vague basis in fact

Please call me Nostradamus