What You Need to Know About Margin Trading

Bitmex (margin trading) and Tax

Hi,
I called the ATO to work out how these trades are worked out and they said it's on the revenue account, like CFDs.
That doesn't make things any easier to understand when you're dealing with BTC as the base currency on Bitmex, not AUD.
Would this be a suitable way to work it out?
Buy 1 BTC for $500. Transfer to Bitmex when BTC is worth $1000. Call this a sell - ($500 Capital gains).
Do a bunch of trades, end up with 2 BTC, but the value of BTC has doubled in this time. Withdraw 2 BTC @ $2000 each.
$3000 profit on revenue account.
New transaction for purchasing 2 BTC at $2000 each.
Am I way off the mark?
Thanks for any help. This is so confusing.
submitted by Crypt0_t4x to BitcoinAUS [link] [comments]

Quadriga Monitor's Report: Quadriga kept no records, paid no taxes, transferred customer's coins to third-party exchanges, and lost most of it margin trading. (plus embezzlement!)

submitted by gamblekat to Buttcoin [link] [comments]

How Taxes Work - Crypto Loans, DeFi, and Margin Trading

How Taxes Work - Crypto Loans, DeFi, and Margin Trading submitted by stratguy56 to ethereum [link] [comments]

How Taxes Work - Crypto Loans, DeFi, and Margin Trading

How Taxes Work - Crypto Loans, DeFi, and Margin Trading submitted by stratguy56 to CryptoCurrencyTrading [link] [comments]

How Taxes Work - Crypto Loans, DeFi, and Margin Trading

How Taxes Work - Crypto Loans, DeFi, and Margin Trading submitted by stratguy56 to LitecoinMarkets [link] [comments]

How Taxes Work - Crypto Loans, DeFi, and Margin Trading

How Taxes Work - Crypto Loans, DeFi, and Margin Trading submitted by stratguy56 to btc [link] [comments]

How Taxes Work - Crypto Loans, DeFi, and Margin Trading

submitted by cryptoallbot to cryptoall [link] [comments]

looking for tax software that supports margin trading and unlimited trades

those are my 2 big requirements, can't find anything that works. need to support 50k+ trades as well as margin trading on bitmex, deribit, okex
submitted by I_SUCK__AMA to CryptoTax [link] [comments]

Complicated Bitcoin Tax Scenarios & How To Fix Them! (BitMex margin trading, mining write-offs, Bitcoin forks, Arbitrage bot traders, Bitcoin IRAs, and more!)

Complicated Bitcoin Tax Scenarios & How To Fix Them! (BitMex margin trading, mining write-offs, Bitcoin forks, Arbitrage bot traders, Bitcoin IRAs, and more!) submitted by stellarowl12 to Bitcoin [link] [comments]

David Dayen: AOC's 70% marginal tax rate won't pay for much. We should reverse corporate and inheritance tax cuts, tax stock trades, treat capital gains as regular income, tax existing wealth, or even print more money (modern money theory).

David Dayen: AOC's 70% marginal tax rate won't pay for much. We should reverse corporate and inheritance tax cuts, tax stock trades, treat capital gains as regular income, tax existing wealth, or even print more money (modern money theory). submitted by nirslsk to LeftWithoutEdge [link] [comments]

Complicated Crypto Tax Situations And How To Fix Them! (Margin, IRAs, DeFi, Masternodes, Arbitrage trading, and much more)

submitted by stellarowl12 to bitcointaxes [link] [comments]

Complicated Crypto Tax Situations And How To Fix Them! (Margin, IRAs, DeFi, Masternodes, Arbitrage trading, and much more)

Complicated Crypto Tax Situations And How To Fix Them! (Margin, IRAs, DeFi, Masternodes, Arbitrage trading, and much more) submitted by stellarowl12 to CryptoTax [link] [comments]

Please help - Margin and short position trades - JAFX - Able to enter accurately with Bitcoin.tax?

EDIT: I am in the U.S., asking in reference to U.S. tax filing for 2018

I've been searching and can't seem to find enough information regarding this topic. I traded through JAFX last year using a margin account, long and short positions. I am able to pull all of the transaction history, including date/time of trade open/close, price at position open, price at position close, profit/loss per trade, etc... (fairly detailed and contains all pertinent information)

I'm having to manually create an excel spreadsheet (can do CSV too) but when I enter into bitcoin.tax:
  1. I have to manually adjust the position size (as it lists, for example, .25 LTC although the total position value was 25LTC (.25 of 1:10 leverage) - changed leverage a few times throughout the year so I'll have to figure each of those out to make sure they calculate correctly
  2. I have to adjust the short positions as sell first then a buy but the date/time confuses the calculator because it has sells before buy
  3. Other various editing issues which I can identify and resolve like formatting of date/time not accepted on all lines, etc....
  4. If I go through the trouble of continuing with this excel sheet, will it calculate correctly with the mismatched times and confusion over sells before buys or is it possible to file these trades as a lump somehow?
Also, I funded the account through Coinbase, I have not uploaded my CB data into Bitcoin.tax yet but I'm assuming it will show the BTC transfer out. I have the JAFX incoming transfer information/amounts (transferred from CB as BTC, received in JAFX as USD - I can disregard fees and pay whatever tax on the full amount of the BTC transfer, if possible) so I can easily justify receipt of those funds from somewhere. All of the money sent from Coinbase to JAFX was ultimately lost, so at the end of the year my balance was $0 with no withdrawals out, only $1.36 for inactivity, withdrawn to JAFX, not to my bank or account.

Any suggestion on how to handle these trades?? The rest of my trades were through Coinbase and Binance so I'll use API to get those in but this group of trades are a nuisance...

Thank you in advance to anyone that can help!!
submitted by ag48600 to bitcointaxes [link] [comments]

Taxes report with Bitfinex and Margin trades

Hi there,
I'm not sure this is the right place but as there are many users using this Exchange to trade and also have to report their gains for taxes, I thought it could be ok to post it. Otherwise, just bad luck for me, I'll try to get answers somewhere else :)
Question is simple: I used Bitfinex for around a year and used Margin trading a lot.
The issue is that if I export the trades list from my history it just shows the actual buy/sell and fees.
But with margin trading and the multiple wallet system, there is more happening. Especially the settlements.
I have multiple thousand of trades, mostly on BTC but that doesn't matter.
If I opened a long and sold at loss (let say a loss of $500) then this -500 is removed automatically from my wallet, this isn't a trade, it's like just removed by Bitfinex.
Also the margin fees (borrowing fees) can get quite high over time and they do not appear (correct me if I'm wrong of course) in the trade list.
Let say I have a long opened for 5 days with ~$2 margin fees per day. Those will be also removed from my wallet in the ledger.
So, is there anyone here who managed to do it in a "simple" way?
I wanted to use Cointracking but they admitted to me via email that they can't manage Bitfinex margin trades because on how Bitfinex works (via API or CSV it doesn't matter, they just can't deal with it)
I know that in the ledger of each coin and USD, there are all details, but it's just a big mess to sort out.
So yeah, if anyone found out a simple way to export the data to calculate those gain and losses, I'll take it
Thanks
submitted by Necka44 to BitcoinMarkets [link] [comments]

Margin trading on Poloniex and Bitcoin.tax

Hello everyone, I am sure many people here are in a rush to get their taxes done. I selected bitcoin.tax for my taxes but have been having some really big issues with them which is discouraging considering they seem to be the main place that people recommend for getting that stuff done around here.
When I first imported my full transaction history from Bitfinex, Binance, Bittrex, Coinbase, GDAX, and Poloniex, I had completely wrong estimates for how much capital gains I had made, like an entire magnitude off. After working with them and reimporting stuff a few times, it seems like those issues are mainly worked out. Still, I'm not sure I would recommend the site in general because at least for me with 10000+ transactions it has having extreme lag all the time, the calculate page doesn't work at all, and many other parts are very slow or take many retries to load (despite me paying 100 bucks for this).
I just have a question for those of you who HAVE used it successfully though. How the hell do you deal with margin trading on Poloniex? I am probably going to have to manually work through every single one of those margin trades and report them as either a gain or loss in BTC or whatever I was holding because bitcoin.tax is interpreting all of these margin trades as just generating free money for myself despite me taking gains or losses on the trades and of course giving back whatever I lended at the end of each position. Do you guys have any advice for this because honestly I'm probably just gonna delete every margin trade from my history as it's incompatible from the website and then just do my best to say the result after that position was closed...
submitted by ThisGoldAintFree to BitcoinMarkets [link] [comments]

Margin trading on Poloniex and Bitcoin.tax

Hello everyone, I am sure many people here are in a rush to get their taxes done. I selected bitcoin.tax for my taxes but have been having some really big issues with them which is discouraging considering they seem to be the main place that people recommend for getting that stuff done around here.
When I first imported my full transaction history from Bitfinex, Binance, Bittrex, Coinbase, GDAX, and Poloniex, I had completely wrong estimates for how much capital gains I had made, like an entire magnitude off. After working with them and reimporting stuff a few times, it seems like those issues are mainly worked out. Still, I'm not sure I would recommend the site in general because at least for me with 10000+ transactions it has having extreme lag all the time, the calculate page doesn't work at all, and many other parts are very slow or take many retries to load (despite me paying 100 bucks for this).
I just have a question for those of you who HAVE used it successfully though. How the hell do you deal with margin trading on Poloniex? I am probably going to have to manually work through every single one of those margin trades and report them as either a gain or loss in BTC or whatever I was holding because bitcoin.tax is interpreting all of these margin trades as just generating free money for myself despite me taking gains or losses on the trades and of course giving back whatever I lended at the end of each position. Do you guys have any advice for this because honestly I'm probably just gonna delete every margin trade from my history as it's incompatible from the website and then just do my best to say the result after that position was closed...
submitted by ThisGoldAintFree to bitcointaxes [link] [comments]

Margin trading on Poloniex and Bitcoin.tax /r/BitcoinMarkets

Margin trading on Poloniex and Bitcoin.tax /BitcoinMarkets submitted by HiIAMCaptainObvious to BitcoinAll [link] [comments]

Taxes report with Bitfinex and Margin trades /r/BitcoinMarkets

Taxes report with Bitfinex and Margin trades /BitcoinMarkets submitted by BitcoinAllBot to BitcoinAll [link] [comments]

The Republican party is not going to win this election unless it persuades the electorate that its primary principles of low marginal tax rates, lighter regulation, free trade, and a sound dollar are the best path to growth.

submitted by conantheking to inthenews [link] [comments]

The dollar standard and how the Fed itself created the perfect setup for a stock market crash

Disclaimer: This is neither financial nor trading advice and everyone should trade based on their own risk tolerance. Please leverage yourself accordingly. When you're done, ask yourself: "Am I jacked to the tits?". If the answer is "yes", you're good to go.
We're probably experiencing the wildest markets in our lifetime. After doing some research and listening to opinions by several people, I wanted to share my own view on what happened in the market and what could happen in the future. There's no guarantee that the future plays out as I describe it or otherwise I'd become very rich.
If you just want tickers and strikes...I don't know if this is going to help you. But anyways, scroll way down to the end. My current position is TLT 171c 8/21, opened on Friday 7/31 when TLT was at 170.50.
This is a post trying to describe what it means that we've entered the "dollar standard" decades ago after leaving the gold standard. Furthermore I'll try to explain how the "dollar standard" is the biggest reason behind the 2008 and 2020 financial crisis, stock market crashes and how the Coronavirus pandemic was probably the best catalyst for the global dollar system to blow up.

Tackling the Dollar problem

Throughout the month of July we've seen the "death of the Dollar". At least that's what WSB thinks. It's easy to think that especially since it gets reiterated in most media outlets. I will take the contrarian view. This is a short-term "downturn" in the Dollar and very soon the Dollar will rise a lot against the Euro - supported by the Federal Reserve itself.US dollar Index (DXY)If you zoom out to the 3Y chart you'll see what everyone is being hysterical about. The dollar is dying! It was that low in 2018! This is the end! The Fed has done too much money printing! Zimbabwe and Weimar are coming to the US.
There is more to it though. The DXY is dominated by two currency rates and the most important one by far is EURUSD.EURUSD makes up 57.6% of the DXY
And we've seen EURUSD rise from 1.14 to 1.18 since July 21st, 2020. Why that date? On that date the European Commission (basically the "government" of the EU) announced that there was an agreement for the historical rescue package for the EU. That showed the markets that the EU seems to be strong and resilient, it seemed to be united (we're not really united, trust me as an European) and therefore there are more chances in the EU, the Euro and more chances taking risks in the EU.Meanwhile the US continued to struggle with the Coronavirus and some states like California went back to restricting public life. The US economy looked weaker and therefore the Euro rose a lot against the USD.
From a technical point of view the DXY failed to break the 97.5 resistance in June three times - DXY bulls became exhausted and sellers gained control resulting in a pretty big selloff in the DXY.

Why the DXY is pretty useless

Considering that EURUSD is the dominant force in the DXY I have to say it's pretty useless as a measurement of the US dollar. Why? Well, the economy is a global economy. Global trade is not dominated by trade between the EU and the USA. There are a lot of big exporting nations besides Germany, many of them in Asia. We know about China, Japan, South Korea etc. Depending on the business sector there are a lot of big exporters in so-called "emerging markets". For example, Brazil and India are two of the biggest exporters of beef.
Now, what does that mean? It means that we need to look at the US dollar from a broader perspective. Thankfully, the Fed itself provides a more accurate Dollar index. It's called the "Trade Weighted U.S. Dollar Index: Broad, Goods and Services".
When you look at that index you will see that it didn't really collapse like the DXY. In fact, it still is as high as it was on March 10, 2020! You know, only two weeks before the stock market bottomed out. How can that be explained?

Global trade, emerging markets and global dollar shortage

Emerging markets are found in countries which have been shifting away from their traditional way of living towards being an industrial nation. Of course, Americans and most of the Europeans don't know how life was 300 years ago.China already completed that transition. Countries like Brazil and India are on its way. The MSCI Emerging Market Index lists 26 countries. Even South Korea is included.
However there is a big problem for Emerging Markets: the Coronavirus and US Imports.The good thing about import and export data is that you can't fake it. Those numbers speak the truth. You can see that imports into the US haven't recovered to pre-Corona levels yet. It will be interesting to see the July data coming out on August 5th.Also you can look at exports from Emerging Market economies. Let's take South Korean exports YoY. You can see that South Korean exports are still heavily depressed compared to a year ago. Global trade hasn't really recovered.For July the data still has to be updated that's why you see a "0.0%" change right now.Less US imports mean less US dollars going into foreign countries including Emerging Markets.Those currency pairs are pretty unimpressed by the rising Euro. Let's look at a few examples. Use the 1Y chart to see what I mean.
Indian Rupee to USDBrazilian Real to USDSouth Korean Won to USD
What do you see if you look at the 1Y chart of those currency pairs? There's no recovery to pre-COVID levels. And this is pretty bad for the global financial system. Why? According to the Bank of International Settlements there is $12.6 trillion of dollar-denominated debt outside of the United States. Now the Coronavirus comes into play where economies around the world are struggling to go back to their previous levels while the currencies of Emerging Markets continue to be WEAK against the US dollar.
This is very bad. We've already seen the IMF receiving requests for emergency loans from 80 countries on March 23th. What are we going to see? We know Argentina has defaulted on their debt more than once and make jokes about it. But what happens if we see 5 Argentinas? 10? 20? Even 80?
Add to that that global travel is still depressed, especially for US citizens going anywhere. US citizens traveling to other countries is also a situation in which the precious US dollars would enter Emerging Market economies. But it's not happening right now and it won't happen unless we actually get a miracle treatment or the virus simply disappears.
This is where the treasury market comes into play. But before that, let's quickly look at what QE (rising Fed balance sheet) does to the USD.
Take a look at the Trade-Weighted US dollar Index. Look at it at max timeframe - you'll see what happened in 2008. The dollar went up (shocker).Now let's look at the Fed balance sheet at max timeframe. You will see: as soon as the Fed starts the QE engine, the USD goes UP, not down! September 2008 (Fed first buys MBS), March 2009, March 2020. Is it just a coincidence? No, as I'll explain below. They're correlated and probably even in causation.Oh and in all of those scenarios the stock market crashed...compared to February 2020, the Fed balance sheet grew by ONE TRILLION until March 25th, but the stock market had just finished crashing...can you please prove to me that QE makes stock prices go up? I think I've just proven the opposite correlation.

Bonds, bills, Gold and "inflation"

People laugh at bond bulls or at people buying bonds due to the dropping yields. "Haha you're stupid you're buying an asset which matures in 10 years and yields 5.3% STONKS go up way more!".Let me stop you right there.
Why do you buy stocks? Will you hold those stocks until you die so that you regain your initial investment through dividends? No. You buy them because you expect them to go up based on fundamental analysis, news like earnings or other things. Then you sell them when you see your price target reached. The assets appreciated.Why do you buy options? You don't want to hold them until expiration unless they're -90% (what happens most of the time in WSB). You wait until the underlying asset does what you expect it does and then you sell the options to collect the premium. Again, the assets appreciated.
It's the exact same thing with treasury securities. The people who've been buying bonds for the past years or even decades didn't want to wait until they mature. Those people want to sell the bonds as they appreciate. Bond prices have an inverse relationship with their yields which is logical when you think about it. Someone who desperately wants and needs the bonds for various reasons will accept to pay a higher price (supply and demand, ya know) and therefore accept a lower yield.
By the way, both JP Morgan and Goldmans Sachs posted an unexpected profit this quarter, why? They made a killing trading bonds.
US treasury securities are the most liquid asset in the world and they're also the safest asset you can hold. After all, if the US default on their debt you know that the world is doomed. So if US treasuries become worthless anything else has already become worthless.
Now why is there so much demand for the safest and most liquid asset in the world? That demand isn't new but it's caused by the situation the global economy is in. Trade and travel are down and probably won't recover anytime soon, emerging markets are struggling both with the virus and their dollar-denominated debt and central banks around the world struggle to find solutions for the problems in the financial markets.
How do we now that the markets aren't trusting central banks? Well, bonds tell us that and actually Gold tells us the same!
TLT chartGold spot price chart
TLT is an ETF which reflects the price of US treasuries with 20 or more years left until maturity. Basically the inverse of the 30 year treasury yield.
As you can see from the 5Y chart bonds haven't been doing much from 2016 to mid-2019. Then the repo crisis of September 2019took place and TLT actually rallied in August 2019 before the repo crisis finally occurred!So the bond market signaled that something is wrong in the financial markets and that "something" manifested itself in the repo crisis.
After the repo market crisis ended (the Fed didn't really do much to help it, before you ask), bonds again were quiet for three months and started rallying in January (!) while most of the world was sitting on their asses and downplaying the Coronavirus threat.
But wait, how does Gold come into play? The Gold chart basically follows the same pattern as the TLT chart. Doing basically nothing from 2016 to mid-2019. From June until August Gold rose a staggering 200 dollars and then again stayed flat until December 2019. After that, Gold had another rally until March when it finally collapsed.
Many people think rising Gold prices are a sign of inflation. But where is the inflation? We saw PCE price indices on Friday July 31st and they're at roughly 1%. We've seen CPIs from European countries and the EU itself. France and the EU (July 31st) as a whole had a very slight uptick in CPI while Germany (July 30th), Italy (July 31st) and Spain (July 30th) saw deflationary prints.There is no inflation, nowhere in the world. I'm sorry to burst that bubble.
Yet, Gold prices still go up even when the Dollar rallies through the DXY (sadly I have to measure it that way now since the trade-weighted index isn't updated daily) and we know that there is no inflation from a monetary perspective. In fact, Fed chairman JPow, apparently the final boss for all bears, said on Wednesday July 29th that the Coronavirus pandemic is a deflationary disinflationary event. Someone correct me there, thank you. But deflationary forces are still in place even if JPow wouldn't admit it.
To conclude this rather long section: Both bonds and Gold are indicators for an upcoming financial crisis. Bond prices should fall and yields should go up to signal an economic recovery. But the opposite is happening. in that regard heavily rising Gold prices are a very bad signal for the future. Both bonds and Gold are screaming: "The central banks haven't solved the problems".
By the way, Gold is also a very liquid asset if you want quick cash, that's why we saw it sell off in March because people needed dollars thanks to repo problems and margin calls.When the deflationary shock happens and another liquidity event occurs there will be another big price drop in precious metals and that's the dip which you could use to load up on metals by the way.

Dismantling the money printer

But the Fed! The M2 money stock is SHOOTING THROUGH THE ROOF! The printers are real!By the way, velocity of M2 was updated on July 30th and saw another sharp decline. If you take a closer look at the M2 stock you see three parts absolutely skyrocketing: savings, demand deposits and institutional money funds. Inflationary? No.
So, the printers aren't real. I'm sorry.Quantitative easing (QE) is the biggest part of the Fed's operations to help the economy get back on its feet. What is QE?Upon doing QE the Fed "purchases" treasury and mortgage-backed securities from the commercial banks. The Fed forces the commercial banks to hand over those securities and in return the commercial banks reserve additional bank reserves at an account in the Federal Reserve.
This may sound very confusing to everyone so let's make it simple by an analogy.I want to borrow a camera from you, I need it for my road trip. You agree but only if I give you some kind of security - for example 100 bucks as collateral.You keep the 100 bucks safe in your house and wait for me to return safely. You just wait and wait. You can't do anything else in this situation. Maybe my road trip takes a year. Maybe I come back earlier. But as long as I have your camera, the 100 bucks need to stay with you.
In this analogy, I am the Fed. You = commercial banks. Camera = treasuries/MBS. 100 bucks = additional bank reserves held at the Fed.

Revisiting 2008 briefly: the true money printers

The true money printers are the commercial banks, not the central banks. The commercial banks give out loans and demand interest payments. Through those interest payments they create money out of thin air! At the end they'll have more money than before giving out the loan.
That additional money can be used to give out more loans, buy more treasury/MBS Securities or gain more money through investing and trading.
Before the global financial crisis commercial banks were really loose with their policy. You know, the whole "Big Short" story, housing bubble, NINJA loans and so on. The reckless handling of money by the commercial banks led to actual money printing and inflation, until the music suddenly stopped. Bear Stearns went tits up. Lehman went tits up.
The banks learned from those years and completely changed, forever. They became very strict with their lending resulting in the Fed and the ECB not being able to raise their rates. By keeping the Fed funds rate low the Federal Reserve wants to encourage commercial banks to give out loans to stimulate the economy. But commercial banks are not playing along. They even accept negative rates in Europe rather than taking risks in the actual economy.
The GFC of 2008 completely changed the financial landscape and the central banks have struggled to understand that. The system wasn't working anymore because the main players (the commercial banks) stopped playing with each other. That's also the reason why we see repeated problems in the repo market.

How QE actually decreases liquidity before it's effective

The funny thing about QE is that it achieves the complete opposite of what it's supposed to achieve before actually leading to an economic recovery.
What does that mean? Let's go back to my analogy with the camera.
Before I take away your camera, you can do several things with it. If you need cash, you can sell it or go to a pawn shop. You can even lend your camera to someone for a daily fee and collect money through that.But then I come along and just take away your camera for a road trip for 100 bucks in collateral.
What can you do with those 100 bucks? Basically nothing. You can't buy something else with those. You can't lend the money to someone else. It's basically dead capital. You can just look at it and wait until I come back.
And this is what is happening with QE.
Commercial banks buy treasuries and MBS due to many reasons, of course they're legally obliged to hold some treasuries, but they also need them to make business.When a commercial bank has a treasury security, they can do the following things with it:- Sell it to get cash- Give out loans against the treasury security- Lend the security to a short seller who wants to short bonds
Now the commercial banks received a cash reserve account at the Fed in exchange for their treasury security. What can they do with that?- Give out loans against the reserve account
That's it. The bank had to give away a very liquid and flexible asset and received an illiquid asset for it. Well done, Fed.
The goal of the Fed is to encourage lending and borrowing through suppressing yields via QE. But it's not happening and we can see that in the H.8 data (assets and liabilities of the commercial banks).There is no recovery to be seen in the credit sector while the commercial banks continue to collect treasury securities and MBS. On one hand, they need to sell a portion of them to the Fed on the other hand they profit off those securities by trading them - remember JPM's earnings.
So we see that while the Fed is actually decreasing liquidity in the markets by collecting all the treasuries it has collected in the past, interest rates are still too high. People are scared, and commercial banks don't want to give out loans. This means that as the economic recovery is stalling (another whopping 1.4M jobless claims on Thursday July 30th) the Fed needs to suppress interest rates even more. That means: more QE. that means: the liquidity dries up even more, thanks to the Fed.
We heard JPow saying on Wednesday that the Fed will keep their minimum of 120 billion QE per month, but, and this is important, they can increase that amount anytime they see an emergency.And that's exactly what he will do. He will ramp up the QE machine again, removing more bond supply from the market and therefore decreasing the liquidity in financial markets even more. That's his Hail Mary play to force Americans back to taking on debt again.All of that while the government is taking on record debt due to "stimulus" (which is apparently only going to Apple, Amazon and Robinhood). Who pays for the government debt? The taxpayers. The wealthy people. The people who create jobs and opportunities. But in the future they have to pay more taxes to pay down the government debt (or at least pay for the interest). This means that they can't create opportunities right now due to the government going insane with their debt - and of course, there's still the Coronavirus.

"Without the Fed, yields would skyrocket"

This is wrong. The Fed has been keeping their basic level QE of 120 billion per month for months now. But ignoring the fake breakout in the beginning of June (thanks to reopening hopes), yields have been on a steady decline.
Let's take a look at the Fed's balance sheet.
The Fed has thankfully stayed away from purchasing more treasury bills (short term treasury securities). Bills are important for the repo market as collateral. They're the best collateral you can have and the Fed has already done enough damage by buying those treasury bills in March, destroying even more liquidity than usual.
More interesting is the point "notes and bonds, nominal". The Fed added 13.691 billion worth of US treasury notes and bonds to their balance sheet. Luckily for us, the US Department of Treasury releases the results of treasury auctions when they occur. On July 28th there was an auction for the 7 year treasury note. You can find the results under "Note -> Term: 7-year -> Auction Date 07/28/2020 -> Competitive Results PDF". Or here's a link.
What do we see? Indirect bidders, which are foreigners by the way, took 28 billion out of the total 44 billion. That's roughly 64% of the entire auction. Primary dealers are the ones which sell the securities to the commercial banks. Direct bidders are domestic buyers of treasuries.
The conclusion is: There's insane demand for US treasury notes and bonds by foreigners. Those US treasuries are basically equivalent to US dollars. Now dollar bears should ask themselves this question: If the dollar is close to a collapse and the world wants to get rid fo the US dollar, why do foreigners (i.e. foreign central banks) continue to take 60-70% of every bond auction? They do it because they desperately need dollars and hope to drive prices up, supported by the Federal Reserve itself, in an attempt to have the dollar reserves when the next liquidity event occurs.
So foreigners are buying way more treasuries than the Fed does. Final conclusion: the bond market has adjusted to the Fed being a player long time ago. It isn't the first time the Fed has messed around in the bond market.

How market participants are positioned

We know that commercial banks made good money trading bonds and stocks in the past quarter. Besides big tech the stock market is being stagnant, plain and simple. All the stimulus, stimulus#2, vaccinetalksgoingwell.exe, public appearances by Trump, Powell and their friends, the "money printing" (which isn't money printing) by the Fed couldn't push SPY back to ATH which is 339.08 btw.
Who can we look at? Several people but let's take Bill Ackman. The one who made a killing with Credit Default Swaps in March and then went LONG (he said it live on TV). Well, there's an update about him:Bill Ackman saying he's effectively 100% longHe says that around the 2 minute mark.
Of course, we shouldn't just believe what he says. After all he is a hedge fund manager and wants to make money. But we have to assume that he's long at a significant percentage - it doesn't even make sense to get rid of positions like Hilton when they haven't even recovered yet.
Then again, there are sources to get a peek into the positions of hedge funds, let's take Hedgopia.We see: Hedge funds are starting to go long on the 10 year bond. They are very short the 30 year bond. They are very long the Euro, very short on VIX futures and short on the Dollar.

Endgame

This is the perfect setup for a market meltdown. If hedge funds are really positioned like Ackman and Hedgopia describes, the situation could unwind after a liquidity event:The Fed increases QE to bring down the 30 year yield because the economy isn't recovering yet. We've already seen the correlation of QE and USD and QE and bond prices.That causes a giant short squeeze of hedge funds who are very short the 30 year bond. They need to cover their short positions. But Ackman said they're basically 100% long the stock market and nothing else. So what do they do? They need to sell stocks. Quickly. And what happens when there is a rapid sell-off in stocks? People start to hedge via put options. The VIX rises. But wait, hedge funds are short VIX futures, long Euro and short DXY. To cover their short positions on VIX futures, they need to go long there. VIX continues to go up and the prices of options go suborbital (as far as I can see).Also they need to get rid of Euro futures and cover their short DXY positions. That causes the USD to go up even more.
And the Fed will sit there and do their things again: more QE, infinity QE^2, dollar swap lines, repo operations, TARP and whatever. The Fed will be helpless against the forces of the market and have to watch the stock market burn down and they won't even realize that they created the circumstances for it to happen - by their programs to "help the economy" and their talking on TV. Do you remember JPow on 60minutes talking about how they flooded the world with dollars and print it digitally? He wanted us poor people to believe that the Fed is causing hyperinflation and we should take on debt and invest into the stock market. After all, the Fed has it covered.
But the Fed hasn't got it covered. And Powell knows it. That's why he's being a bear in the FOMC statements. He knows what's going on. But he can't do anything about it except what's apparently proven to be correct - QE, QE and more QE.

A final note about "stock market is not the economy"

It's true. The stock market doesn't reflect the current state of the economy. The current economy is in complete shambles.
But a wise man told me that the stock market is the reflection of the first and second derivatives of the economy. That means: velocity and acceleration of the economy. In retrospect this makes sense.
The economy was basically halted all around the world in March. Of course it's easy to have an insane acceleration of the economy when the economy is at 0 and the stock market reflected that. The peak of that accelerating economy ("max velocity" if you want to look at it like that) was in the beginning of June. All countries were reopening, vaccine hopes, JPow injecting confidence into the markets. Since then, SPY is stagnant, IWM/RUT, which is probably the most accurate reflection of the actual economy, has slightly gone down and people have bid up tech stocks in absolute panic mode.
Even JPow admitted it. The economic recovery has slowed down and if we look at economic data, the recovery has already stopped completely. The economy is rolling over as we can see in the continued high initial unemployment claims. Another fact to factor into the stock market.

TLDR and positions or ban?

TLDR: global economy bad and dollar shortage. economy not recovering, JPow back to doing QE Infinity. QE Infinity will cause the final squeeze in both the bond and stock market and will force the unwinding of the whole system.
Positions: idk. I'll throw in TLT 190c 12/18, SPY 220p 12/18, UUP 26c 12/18.That UUP call had 12.5k volume on Friday 7/31 btw.

Edit about positions and hedge funds

My current positions. You can laugh at my ZEN calls I completely failed with those.I personally will be entering one of the positions mentioned in the end - or similar ones. My personal opinion is that the SPY puts are the weakest try because you have to pay a lot of premium.
Also I forgot talking about why hedge funds are shorting the 30 year bond. Someone asked me in the comments and here's my reply:
"If you look at treasury yields and stock prices they're pretty much positively correlated. Yields go up, then stocks go up. Yields go down (like in March), then stocks go down.
What hedge funds are doing is extremely risky but then again, "hedge funds" is just a name and the hedgies are known for doing extremely risky stuff. They're shorting the 30 year bond because they needs 30y yields to go UP to validate their long positions in the equity market. 30y yields going up means that people are welcoming risk again, taking on debt, spending in the economy.
Milton Friedman labeled this the "interest rate fallacy". People usually think that low interest rates mean "easy money" but it's the opposite. Low interest rates mean that money is really tight and hard to get. Rising interest rates on the other hand signal an economic recovery, an increase in economic activity.
So hedge funds try to fight the Fed - the Fed is buying the 30 year bonds! - to try to validate their stock market positions. They also short VIX futures to do the same thing. Equity bulls don't want to see VIX higher than 15. They're also short the dollar because it would also validate their position: if the economic recovery happens and the global US dollar cycle gets restored then it will be easy to get dollars and the USD will continue to go down.
Then again, they're also fighting against the Fed in this situation because QE and the USD are correlated in my opinion.
Another Redditor told me that people who shorted Japanese government bonds completely blew up because the Japanese central bank bought the bonds and the "widow maker trade" was born:https://www.investopedia.com/terms/w/widow-maker.asp"

Edit #2

Since I've mentioned him a lot in the comments, I recommend you check out Steven van Metre's YouTube channel. Especially the bottom passages of my post are based on the knowledge I received from watching his videos. Even if didn't agree with him on the fundamental issues (there are some things like Gold which I view differently than him) I took it as an inspiration to dig deeper. I think he's a great person and even if you're bullish on stocks you can learn something from Steven!

submitted by 1terrortoast to wallstreetbets [link] [comments]

Given Romney's push on minimizing capital gains tax: empirical data shows cap gains tax rates do influence investment behavior but only marginally. Change in the stock market prices and volume of trade distort any potential tax impact.

submitted by chashr to Economics [link] [comments]

Would Biden move forward with Kamala's plan to tax stock trades?

Last July, Harris released a plan to provide “comprehensive health insurance that covers every American.” The way she planned to achieve that? By expanding Medicare.
Unlike Bernie Sanders, though, Harris did not envision achieving this goal by taxing families making under $100,000. Instead, she planned to pay for “Medicare For All” by taxing Wall Street.
Her plan called for a 0.2% tax on stock trades, a 0.1% tax on bond trades and a 0.002% tax on derivative transactions. She claimed these taxes would raise more than $2 trillion over the course of a decade. Critics of the plan argued that taxing financial transactions in this way could make it harder for Americans to build retirement savings.

.2% is a ripoff, retailers wouldnt be able to afford to trade on margin at that rate.
https://www.marketwatch.com/story/kamala-harris-on-student-loan-forgiveness-medicare-universal-basic-income-credit-scores-and-a-tax-on-trading-stocks-2020-08-12?siteid=yhoof2&yptr=yahoo
submitted by DotNetPhenom to pennystocks [link] [comments]

DAY TRADING TAXES! EXPLAINED! - YouTube ACCOINTING Explains - Episode 14. Crypto Margin Trading Fees Margin Trading 101: How It Works - YouTube Margin Trading  Trading Terms - YouTube What is Margin Trading?  Fidelity - YouTube

Trading taxes: Let's discuss what qualifies as a trading business, and important guidelines that will set you up for success. ON MARGIN TRADING AND TAXES: Margin traders are constantly making short-term capital gains and losses, and thus they are subject to the short-term capital gains tax (both its rate and the requirement to report trades and pay quarterlies). Meanwhile, those who simply hold crypto avoid this and, if they hold long enough, can enjoy long-term Short Selling and Trading with Margin. Trading with margin while shorting is a different game altogether. Unlike going long where the gains are unlimited, when you short, the risks are now unlimited. This is why when it comes to shorting, I do not use more than my available cash on hand. Margin trading taxes for Bitfinex and Poloniex are a little more complex, but for our Pro and VIP level users, we’ll handle the calculations for you. We can also account for lending interest income and liquidations. Get Started The benefits of margin. When margin is used for investing purposes, it can magnify your profits, but it can also magnify your losses. Here’s a hypothetical example that demonstrates the upside; for simplicity, we’ll ignore trading fees and taxes. Assume you spend $5,000 cash to buy 100 shares of a $50 stock.

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DAY TRADING TAXES! EXPLAINED! - YouTube

One trading jargon that you’ll hear very often is margin. It’s usually in terms like margin account, margin trading and even margin call. It seems a bit comp... Your A to Z on margin trading with Binance. Learn everything from opening your account, how to long and short and how to repay margin loans. Subscribe to kee... Marginal and average tax rates explanation. For Unit 6, www.inflateyourmind.com by John Bouman. Made with Explain Everything Day Trading Taxes! We talk about DayTrading taxes and how they work. Have you ever heard of a Wash Sale? Have you thought about becoming a Maker to Market cl... Hello friends, today's video is how to calculate income tax on stock trading, intraday trading profit, futures and options trading, short term trading and long term investment. ... Avoid Margin ...

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