Comment Even better, tax it (Score 1) 342
Put a tax on fast trading, but don't outlaw it. If you want to trade within a second, you pay a 50% profit tax. Trade within a day, 40%, trade within a week, 30%. If you lose at all, not matter how long you're holding on to stock, you don't get to subtract that from your profits. If something happens, you're free to trade, but you have to pay taxes regardless if you make a profit on the deal. If you want to cut your losses, you're tax free since you're losing on the deal. See it as a gambling tax, since either you have insider knowledge, you are manipulating the market, or you were gambling if you can consistently make money on HFT. Because providing legally accepted proof of any of these is hard, just tax it as gambling. Any proof that it's not gambling will automatically be proof of one of the others, which are illegal.
People say this won't work unless it's introduced globally, but I think that's not going to be the case. Sure, HF traders will hate it, but the companies that are actually putting up their shares will be happy to oblige and still register their stock at exchanges that will have this sort of taxes implemented. People that are actually interested in investing in a company will not mind either, since they have faith in the company and won't have to deal with market whims and price manipulations as much. Finally, the really good traders will find a way to still make money out of this, but they will have to actually look at the economy and what companies are doing, instead of whatever else they are doing now.