Why do you want to do this? Is purchasing stocks for long-term positions via your online E*Trade account not sufficient?
No. I actually use Sharebuilder. With Sharebuilder, there are (a) fees associated with buying and purchasing stock that make it unrealistic to engage in high-frequency trading and (b) a lack of a robust, real-time quote that shows second-to-second movements of the stock’s ticks. My own personal experience with Sharebuilder is that nearly all of my stock purchases ended up being slightly higher per share than I thought (e.g. Place an order for stock X for 5.40 and end up purchasing X stock for 5.41). . I am willing to concede this is coincidence. I simply want the tools and the ability to purchase or sell shares directly through the NYSE that is directly linked to my bank account. I also want my stock purchases to be time-stamped to ensure that that the buyer “locks” in the price irregardless (is that a word?) subsequent upticks or downticks; stocks should expressed to the fourth or fifth decimal place so that I could trade even more efficiently.
I just don’t see a reason why corporations and just a select few can engage trading thousands of shares over the course of seconds to generate risk-free wealth. It’s very difficult to sell short hundreds of shares of Sirius XM radio when there is a $10 fee for each transaction. Lowering the price to 5 cents a transaction would allow me (a person making less than $22,000 a year ) to purchase, sell, and short shares in perpetuity. Like I said earlier in this thread, I don’t begrudge any individual or corporation for using the stock market as a Casino; I just want to be able to do the same thing so that I can pull money out of a hat, too.
- Honesty
Britain has a 0.5% transaction tax, yet the London stock exchange is still doing business.
Designated market makers (aka large financial institutions) are exempt from the transaction tax in London. Only Joe Q. Public pays it. The large investment banks would be ecstatic if similar legislation were passed in the US. It would legislate away all their competition.
I suggest you learn the differences between the various types of orders you can submit. The two main types are market orders and limit orders. A market order will execute at the current “ask” price for a buy order, or the current “bid” price for a sell order. You are sacrificing the spread between the two prices, but are guaranteed to get your order filled. A limit order will allow you set a maximum (minimum) price for you buy (sell) order. However, you are not guaranteed to get a fill. Your limit order will only fill if it is matched by an opposing side marketable order.
Think about eBay. A market order is like the “Buy It Now” option, while a limit order is similar to bidding on an item.
In your example, I assume the market was Bid 5.40 x 5.41 Ask and you sent a market order, thus you received the 5.41 price.
Again, no one has this - not even Goldman Sachs’ prop trading desk.
Every trade is time-stamped to the second and also includes the venue on which the trade was executed. If you wanted to, you could get this information from Sharebuilder. There’s not enough liquidity in the marketplace to price most stocks to that degree.
It’s not risk-free. It’s extremely competitive. Again, do you begrudge Cargill for having access to bulk oatmeal prices?
Surprised that no one has commented on HFT recently.
Yep. I didn’t know. We have a better idea now. One thing we can count on is that regulaters will draw the wrong lessons. Go, Tobin Tax!
Good for you. The mathematical fact is that any winning trader without systemic value is skimming from a “zero-sum game” and thus “hurts everybody else” if only slightly. And that’s ignoring the risk of speculation-induced crisis.
WRT that wiki article - that appears to analyze a Financial Transaction Tax as a revenue raising measure, and conclude that it fails at that.
In this thread, it’s being proposed as a volatility reduction mechanism. Personally I’d be quite happy to lose a few percentage points off the share market in order to decrease the chance of spectacular financial crashes. Also, some of the things implicitly labelled in the wiki article as “bad results” - it’s not immediately obvious to me why they are “bad”. What’s wrong with a decrease in the volume of trading? (unless you see the tax purely in terms of revenue raising). If the intention of the tax is to weed out “non-productive” trades then that’s rather teh point of the exercise.
Nope, that’s incorrect. The stock market is not zero-sum. Even if it was, so what? What’s your point? That I should feel bad for performing well in an activity in which other people willingly and knowingly participate? Also, please define exactly which traders provide systemic value and how we determine who they are.
If you’re talking about the futures and options market - yes, those markets are zero-sum. However, those markets exist because they provide a positive and useful service to the economy at large in the form of price discovery and risk transference. The fact the the individual players’ gains and losses net to zero is irrelevant. In an economic sense, trader, market makers, and other speculators get “paid” for using their own capital to assume risk from other participants wishing to lay off their own.
I can’t imagine the contempt you hold for professional poker players.
I see you’ve completely misunderstand me. Pay attention:
First, I have no contempt for professional poker players; indeed have been a professional gambler myself. But I wouldn’t want my electricity bill to depend on a poker game in which I’m not even playing.
Similarly, I have only admiration for successful traders. The question is simply the public interest: Should regulations help or hinder their activities? I’m not generally opposed to speculation. For example, I’ve never spoken against short-selling. It may be a useful way to improve price discovery.
And this brings us to your (unclear) opening comment, to which my best response may just be to repeat my statement that you’re responding to:
The mathematical fact is that any winning trader without systemic value is skimming from a “zero-sum game” and thus “hurts everybody else” if only slightly.
Traditional market-markers (e.g. NYSE specialists) provide an obvious systemic value. Hedge traders provide value in that they make assumed risk transparent, at least to the extent that such traders are hedging actual risk. The speculators who cover their action are then also systemically necessary.
Although I have only admiration for individual speculators, there comes a point, especially when well-financed robot traders are introduced, where there is obviously no “systemic value” to increased trading, profits necessarily come from other investors, and general risk to stability comes for no purpose than the enrichment of Wall Street firms (the same firms, BTW, which recently bilked U.S. taxpayers.)
Thanks for the bump. Nor do I want to sit in a game where some of the players are colluding and using banks of computers to analyze my play.
I’d sooner play Powerball.
I apologize for being a bit defensive in that last post. I read some snark in the “Good for you” comment that wasn’t intended.
As far as your other points, I pretty much agree. The fact that we’ve gotten to a point where institutions are allowed to speculate with the implicit backing of the US government is sickening.
Thank you.
http://www.nytimes.com/2010/05/17/business/17trade.html?partner=MYWAY&ei=5065
Is this what “investing” in industrial and technological progress all about? Purely criminal enterprises if you ask me. Legal but nonetheless, criminal.
How so?
You clearly don’t like the idea of a marketplace that contains short term dealers. They’ve been around for decades. Locals and other market makers on the exchange floors frequently hold positions for only seconds - and they’ve been doing it for decades. They trade based on order flow, not fundamentals (for the most part). Do you have a problem with that idea?
The documentary, Floored, was just released. You can watch it for free here. It tells the story of the decline of floor trading and the rise of computer traders.
I think that’s really my issue. I’ll check it out.