if you read financial posts around the world, i-banks and stock exchanges always demand lower or elimination of stamp duty, negotiable broker commissions for stock investments, WHY?
they said it is for your good, create liquidity and stock exchange excels, more stocks will list so you have more choices and liquidity to get in/out of the market. do you think this sounds right.
yeah, it sounds right for the i-banks and exchanges but not you and me. why? because they had been pushing derivatives mainly stock warrants to the public, with no costs to trade [if no stamp duty and very low commissions], they can manipulate the market as they wish because it does not cost them anything or very low costs.
small individual investors probably encountered one way or the other that they guessed right the trend of the stock [north or south], but when the warrants closed out, the stock managed to stay above or below strike price and falls/rises sharply after the derivatives expired. one sure indication of manipulation.
look at the hong kong market, the turnover is around 40-50 billion, yet a quarter of the turnover are in covered warrants. who eventually bet right - the i-banks.
if you cant beat them, join them, buy i-banks stocks.
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