Author : Scott Mixon
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (13 download)
Book Synopsis U.S. Experience with Futures Transactions Taxes by : Scott Mixon
Download or read book U.S. Experience with Futures Transactions Taxes written by Scott Mixon and published by . This book was released on 2016 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: The transactions tax on futures sharply reduced trading volume on wheat and corn contracts during the 1920s and 1930s but had no apparent effect on volatility or market quality. I find no evidence of a tax effect on open interest: I hypothesize this is because the relative magnitude of the tax was significantly higher for intermediaries than for other participants. Instead, the tax appears to have substantially reduced intra-day trading but not longer-term positioning. Volume-related proxies of liquidity therefore exhibit a strong relation with tax rates, but other measures of market quality show no relation to tax rates. In the long-run, however, exchange members doubled the minimum tick size in order to retain a large number of market makers and offset the impact of the tax.