china white
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It is tempting (and very profitable if you know what you are doing) to trade such EMs as Russia or Brasil in the times of a crisis. In my particular case I have been short local currencies (Brasilian Real and Russian Rouble) against the USD since Srptember last year. You can pretty much figure out if I am in the money or not 
What makes things even jucier is that in this day and age you can easily get quarterly contracts on Rouble/Dollar cross listed on FORTS, the futures and options exchange in Russia. You can trade the front-end contract there (March09 currently) with a leverage of 25, and the following one (June09) at 20 leverage.
HOWEVER you need to know the following if you intend to venture there:
Starting recently, the taxman in Russia decided to clock up some extra ducats and pulled a fast one really. Check this out:
It has always been common practice in Russia that people could not net off spot trades and futures/options for tax purposes, but that's something everyone knew of. Starting a couple of weeks ago, you cannot even net off winning and losing trades in the same underlying, say you made a mil trading March contract in USDRUB and then you lose a mil trading exactly the same contract, the taxman will still come to you for 13% of the winning leg, i.e. for 130K.
Insane innit? What is even worse is that the taxman in Russia has the authority to go to FORTS (futures/options exchange) and freeze your money there towards your tax liabilities payable by February 2010. How does that sound? Long story short, I have 8.5 mil roubles frozen on FORTS, plus apparently the taxman wants another 2.5 mio roubles, that being something they did not have a chance to put their hand on. All that on my current P/L of 13 mio Roubles since the beginning of the year. Just a tad above 13% Russia's tax on investment innit?
Goes without saying, this new trick had not been advertised at all, everything happened cloak and dagger so to speak, you'd just log into your account on FORTS one day and see your money frozen with a small print notifuication that your tax liability for 2009 has been re-calculated .....
Well, joys of making money in Russia Of course the exchange and quite a few people far more influential than me are lobbying lifting this new tax practice rightly arguing that if this shaban keeps on going, Russia can forget about fresh money invested for the next decade which is hardly in line with Mr Prersident's statement in regard to developing free markets in Russia etc.... - however the way it stands now, people are pretty much shafted.....
Something I thought you might want to know if you decide to take a position in Russia.
What makes things even jucier is that in this day and age you can easily get quarterly contracts on Rouble/Dollar cross listed on FORTS, the futures and options exchange in Russia. You can trade the front-end contract there (March09 currently) with a leverage of 25, and the following one (June09) at 20 leverage.
HOWEVER you need to know the following if you intend to venture there:
Starting recently, the taxman in Russia decided to clock up some extra ducats and pulled a fast one really. Check this out:
It has always been common practice in Russia that people could not net off spot trades and futures/options for tax purposes, but that's something everyone knew of. Starting a couple of weeks ago, you cannot even net off winning and losing trades in the same underlying, say you made a mil trading March contract in USDRUB and then you lose a mil trading exactly the same contract, the taxman will still come to you for 13% of the winning leg, i.e. for 130K.
Insane innit?
What is even worse is that the taxman in Russia has the authority to go to FORTS (futures/options exchange) and freeze your money there towards your tax liabilities payable by February 2010. How does that sound? Long story short, I have 8.5 mil roubles frozen on FORTS, plus apparently the taxman wants another 2.5 mio roubles, that being something they did not have a chance to put their hand on. All that on my current P/L of 13 mio Roubles since the beginning of the year. Just a tad above 13% Russia's tax on investment innit? Goes without saying, this new trick had not been advertised at all, everything happened cloak and dagger so to speak, you'd just log into your account on FORTS one day and see your money frozen with a small print notifuication that your tax liability for 2009 has been re-calculated .....
Well, joys of making money in Russia
Of course the exchange and quite a few people far more influential than me are lobbying lifting this new tax practice rightly arguing that if this shaban keeps on going, Russia can forget about fresh money invested for the next decade which is hardly in line with Mr Prersident's statement in regard to developing free markets in Russia etc.... - however the way it stands now, people are pretty much shafted.....Something I thought you might want to know if you decide to take a position in Russia.
