"A casino that happens to still be open"
Jun. 25th, 2020 02:28 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
brin_bellway[cw: (relatively mild, though that's not saying much) government bullshit]
Not exactly about this one *specifically*, but it's the most recent example: [Bloomberg; Wayback] (by Matt Levine)
Whenever Robinhood comes up in the news, I always end up boggling at how...well. How *foreign* the reasoning is.
Canada doesn't have zero-fee stock trading and America does, and from my perspective this is obviously backwards. What does *America*, of all places, need zero-fee stock trading for?
Because when *I* think "what would one use zero-fee stock trading for", the immediate obvious answer, the top result by a large margin, is "simulate illegal index funds while obeying the letter of the law". I'm forbidden from buying an S&P500 *basket* outside of [a retirement account]/[the right kind of foreign brokerage]/[a relationship with an expensive specialist accountant, and even then one has to be very careful], but the only thing preventing me from buying every S&P500 stock *individually* is how cost-prohibitive it is to pay $10 on each of several hundred stocks every time one wants to make a transaction.
(well, that and the List)
But these people on Robinhood are U.S. residents! They can just buy American-domiciled baskets on local exchanges! No Form 8621s, no hunting around for an American brokerage that accepts foreign mailing addresses, no Norbert's Gambits, no need even to hedge against the exchange-rate risk of keeping your savings and your spendings in different currencies! It all just *works* when you're them! Without the need for kludging something together that'll let you kiss the IRS's ass from afar, what *point* is there in small-scale transactions of individual stocks?!
...apparently the answer is "day trading", which...I'll leave that to professionals and games, thanks. Earth is too big and too competitive a trading market to make a steady profit in without dedicating a career to it, and as for profiting by luck, I don't enjoy gambling. Life is too risky as it is.
Not exactly about this one *specifically*, but it's the most recent example: [Bloomberg; Wayback] (by Matt Levine)
Whenever Robinhood comes up in the news, I always end up boggling at how...well. How *foreign* the reasoning is.
Canada doesn't have zero-fee stock trading and America does, and from my perspective this is obviously backwards. What does *America*, of all places, need zero-fee stock trading for?
Because when *I* think "what would one use zero-fee stock trading for", the immediate obvious answer, the top result by a large margin, is "simulate illegal index funds while obeying the letter of the law". I'm forbidden from buying an S&P500 *basket* outside of [a retirement account]/[the right kind of foreign brokerage]/[a relationship with an expensive specialist accountant, and even then one has to be very careful], but the only thing preventing me from buying every S&P500 stock *individually* is how cost-prohibitive it is to pay $10 on each of several hundred stocks every time one wants to make a transaction.
(well, that and the List)
But these people on Robinhood are U.S. residents! They can just buy American-domiciled baskets on local exchanges! No Form 8621s, no hunting around for an American brokerage that accepts foreign mailing addresses, no Norbert's Gambits, no need even to hedge against the exchange-rate risk of keeping your savings and your spendings in different currencies! It all just *works* when you're them! Without the need for kludging something together that'll let you kiss the IRS's ass from afar, what *point* is there in small-scale transactions of individual stocks?!
...apparently the answer is "day trading", which...I'll leave that to professionals and games, thanks. Earth is too big and too competitive a trading market to make a steady profit in without dedicating a career to it, and as for profiting by luck, I don't enjoy gambling. Life is too risky as it is.
