Comment Text:
i0-001
COMMENT
CL-01630
From."
Sent."
To,"
Subject,"
John Pettit
Thursday, January 21, 2010 8"45 AM
secretary
Regulation of Retail Forex
identification number RIN
3038-AC61
I received this email stating that the U.S. Commodity Futures Trading Commission (CFTC) is seeking
public comment on proposed regulations concerning retail Forex trading. As part of the proposed
regulations, it is stated: "leverage in retail forex customer accounts would be subject to a 10-to-1
limitation. Iwould like to makea public comment.
While I 100% agree with you that leverage in forex trading should be regulated, I do not think it needs
to be lowered to 10:1. Iamgoing to tell you where the real problem lies with regards to leverage and
trading forex. 10:1 leverage is not the problem. You can limit leverage to 1:1 and novice traders are
still going to lose their money to experienced traders. In my opinion, restricting leverage to 10:1 is
simply babying and trying to control traders too much. If you have any idea what you are doing, then
you can comfortably trade using 10:1 leverage in my opinion. Plenty of profitable traders use more
then 10:1 leverage. What I would like to see the CFTC do is make it illegal for online brokerages to
allow customers to open up mini accounts with a only couple hundred dollars, and then let them trade
$10,000 mini-lots using 200:1 or more leverage, because they dont offer micro lots(S1,000 or less per
lot). That, in my opinon, is nothing but stealing because inevitably you will lose your money in that
scenario unless you get ridiculously lucky or are an expert trader(and even then the odds are stacked
against you). These brokerages are obviously preying on the inexperienced newbie traders who dont
realize that trading with 200:1 leverage isa recipe to lose everything in your account. Make them
either raise the minimum required account balance to trade 1 full mini Iot(I consider this to be
$10,000) or make them offer their customers the option of trading micro lots in $1,000 increments or
lower IF they are going to allow customers to open up accounts with such small minimum account
balance requirements. This is 1 of the most crooked practices that goes on(although lets be honest
here...wall street was built on ripping off the common man so this is nothing new), and I would guess a
huge amount of newbie traders wipe out quite a few $250 or $500 accounts before they realize that
they never even had a chance to make it in the long run because there accounts are not even close to
properly funded to trade $10,000 lots. I know I did. It took me $2,000 to realize that they were
setting me up for disaster. It seems so obvious to me now, but I wasnt even smart enough to deposit
the $2,000 all at the same time. Instead, Iwould make the minimum deposit of $250, tradea $10,000
lot, watch a currency move a penny or so against me, get a margin call(usually late though, to make
sure I lost more money I presume), and then make the same $250 deposit...and do the same thing
over again. When you are starting out asa brand new trader, you justdont know these things and it
would nice to have the CFTC make sure that this sort of crooked BS STOPS once and for all. 200:1
leverage isa problem. 100:1 leverage isa problem. 10:1 leverage IS NOTA PROBLEM. If you want
to regulate this industry, then STOP TRYING TO PROTECT US FROM OURSELVES BY LIMITING OUR
LEVERAGE AND START TRYING TO PROTECT US FROM THE DISHONEST CROOKED ONLINE
BROKERAGES THAT MIS-LEAD NEWBIES WITH FALSE PROMISES OF EASY MONEY AND LET THEM SET
UP ACCOUNTS WITH MINIMUM BALANCES THAT ARE WAY TOO SMALL TO BE TRADING $10,000 LOTS.
Thank you for you time,
John D Pettit
Date: Wed, 20 Jan 2010 21:12:56 -0500
From: [email protected]
To: [email protected]
Subject: CFTC's Proposal of Leverage Changes: How You Can Helpi0-001
COMMENT
CL-01630
Dear Valued Customer,
As many of you are aware, the U.S. Commodity Futures Trading Commission (CFTC) announced on January 13, 2010
that it is seeking public comment on proposed regulations concerning retail Forex trading.
As part of the proposed regulations, it is stated: "leverage in retail forex customer accounts would be subject to a 10-to-1
limitation," which means 10:1 leverage would be the maximum amount allowed for all Forex traders in the U.S.
An example of how the proposed regulatory restrictions would affect a major currency pair appears below:
Maximum Leverage under Current Regulations
USD/CHF
100:1 leverage (one percent)
1 lot (100,000)
Margin requirement: $1,000
Maximum Leverage under Proposed CFTC Changes
USD/CHF
10:1 leverage (10 percent)
1 lot (100,000)
Margin requirement: $10,000
We stand behind the belief that you should be given the freedom and right to choose the amount of leverage that is
appropriate for your individual desired risk, and that this basic principle of 'choice' is in jeopardy by the proposed CFTC
regulations.
If you feel strongly about the proposal, we encourage you to help determine the outcome of these proposed regulations.
You can help make an impact by sending comments directly to the CFTC at: [email protected].
Please include 'Regulation of Retail Forex' in the subject line of your message and the identification number RIN 3038-
AC61 in the body of the message.
You can also submit your comments by any of the following methods (include above ID number):
¯
Fax:
(202) 418-5521
¯
Mail: David Stawick, Secretary Commodity
Futures Trading Commision 1155 21st Street, N.W.,
Washington, DC 20581
¯ Courier: Use the same as mail above.
In the upcoming days, Interbank FX and the rest of the U.S. Forex Dealer Coalition will be releasing a more formal
opinion about the proposed changes. Please feel free to read further details about the regulation on the CFTC website by
clicking here.
In the interim, we encourage you to voice your opinions to the CFTC and your local U.S. representative.
As always, we want the best for our traders. We hope you'll join forces with us to prohibit the proposed leverage
requirements.
The Interbank FX Team
/;2 FxDo .....
International
US and Canada 866.468.3739 Australia
1.800.884.912
Indonesia
001.803.017.9112
Malaysia
1.800.813.776
New Zealand 0800.446647 Singapore
800.101.2097 United Kingdom 0.808.120.1966 International +1.801.930.6800
Interbank FX
TM
LLC I IBFXTM I IBFXUTM I Registered FCM, Member NFA
Interbank FX I 3165 Millrock Drive STE 200 I Salt Lake City, UT 84121 I Tel: 1.866.468.3739i0-001
COMMENT
CL-01630
To opt-out of future emails from Interbank FX, click
here.
Trading in the off exchange retail foreign currency market is one of the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The leveraged nature of FX trading means that any market movement will have an
equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain
a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call
within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses.
Your E-mail and More On-the-Go. Get Windows Live Hotmail Free.
Sign up now.
Your E-mail and More On-the-Go. Get Windows Live Hotmail Free.
Sign up now.
