Comment Text:
i0-001
COMMENT
CL-01446
From:
Sent:
To:
Subject:
Samuel
Thursday, January 21, 2010 1:05 AM
secretary
Regulation of Retail Forex
To whom it may concern:
Regarding
"public comment on proposed regulations concerning retail Forex trading".
Identification number:
RIN 3038-AC61
As a forex trader, I am surprised at such a proposed restriction in leverage to 1:10. This is a huge difference from
the current leverage of 1:100 and previous leverage of 1:400 offered by other brokers in this international
business. Also such leverages (ie. 1:400) are still available through other overseas international businesses not
regulated by your department. With such competition business would simply move offshore. If customers are
losing money trading, then using a smaller leverage will only generally mean that it takes them longer to lose their
capital (ie. they will still lose it trading due to their inaccurate/insufficient/haphazard system and not due to the
leverage). The customer & broker should maintain the right to determine the leverage as the margin should only
be used as a cover for slippage on a margin call. This slippage should be the PRIMARY determination for the
sizing of the required margin. Reducing the leverage reduces the return on any trading system and thus reduces
the system's profitability & thus reduces the system's viability.
In my opinion, reducing the leverage to 1:10 would ultimately reduce the viability of Futures Trading to a level that
it wouldn't be a viable commercial arrangement.
Regards,
Samuel Weinholz
