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Is it really possible to tax the rich?
(lemmy.world)
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this post was submitted on 14 Nov 2024
138 points (94.8% liked)
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I don't understand what you're trying to say, but I'm not expecting you clarifying to help
Well, a lot of stock trading isn't as simple as just stock picking, buying and selling individual stocks.
Much of the market is made up of derivatives trading, such as options, where you aren't trading the stock itself, instead you are trading the option to buy the stock.
The value of the option is derived from the value of the underlying asset, but it is not absolutely coupled to it (this is how a lot of the money is made, by finding market inefficiencies and capitalizing on things like slippage, where there is a mismatch in the value of the derivative and it's underlying)
What the person above is saying is that, when it becomes no longer profitable to trade underlying assets directly, new derivative markets will be invented that trade around other underlying assets.
Think about unregulated Bitcoin trading for example, while contrived, imagine a crypto currency that is coupled with the price of another asset (these exist, like USDcoin) such as a stock, future, option, or something else.
I should add, typically the derivative kind of collapse into the underlying at some point, but in the case of an option, it might be traded 100 times before that happens, during each of those trades the actual asset (e.g. the underlying stock) doesn't actually change possession, and a given side of the contract may or may not be changing possession. If you write a call option for a 100 shares of Ford you own, you aren't selling the stock unless the actual call gets assigned and you are required to fulfill the contract, but the 'buyer' side of the contract could have been sold 100 times in the meantime.
All this to say, it's complicated and there are lots of opportunities for shady shit to happen.
Yeah, and this should showcase just how bullshit the system is. IMO every one of those 100 trades in the middle should be taxed, this removes bullshit from the system, you can't buy a contract saying you'll buy the stock, because that would be buying something of that value and would be taxed. We need to start seeing those 100 trades, as what they are, i.e. a way to try to rig the system.