Comment Text:
i0-001
COMMENT
CL-01899
From:
Sent:
To:
Subject:
James Guilford
Thursday, January 21, 2010 2:45 PM
secretary
Regulation of Retail Forex
Dear Secretary Stawick,
I agree with most of the changes the CFTC is proposing -- with one exception; the proposed reduction in
allowable leverage from 100 to 1 down to 10 to 1. I understand this is being offered as a means to
protect retail traders and keep smaller traders from participating in this market. However, the main effect
will be to drive smaller traders to open accounts abroad, where there is much more lax regulation, and to
risk a higher percentage of their portfolio, thereby endangering them much more than the 100 to 1
leverage. Personally, I use stops and only risk 1% of my available cash on any one trade. If the leverage
ratio is lowered to 10:1, I would have to risk more of my funds in order to trade, and that makes no
sense to me.
The risks of high leverage is well understood by 99.999 percent of retail traders, and is one of the main
reasons they participate in the FOREX market. Several friends of mine were able to start with small
stakes and build a substantial nest egg with this leverage. Now, you propose to take that opportunity
away from me. Perhaps a special waiver could be signed stating that the participant is fully aware of the
risks of such a high leverage ratio. I have to tell you I don't like that very much. Please leave the
allowable leverage at 100 to 1.
Thank you,
Michael Guilford
2403 Pima Lane
Ventura, CA 93001
