Will the proposed Financial Transaction Tax kill HFTs?
Feb 21, 2020
10 Comments
Both Sanders and Bloomberg have proposed a financial transaction tax. Will this kill HFTs like Hudson River Trading, Tower Research Capital, etc.
#leetcode
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Keep in mind, when you transfer money to a brokerage account like Fidelity, to get paid interest on the cash requires buying money market funds. Buying a 2 year T bill yielding 1.4% would cost 0.5% up front, ouch.
Kill might be too strong of a word admittedly, I believe there is transaction tax in China for example but hedge funds are still able to operate, just with more difficulty.
If this comes to pass, NYC is in deep s*** because it relies on the tax revenue from all the financial companies to survive, and most of that will disappear overnight.