Comment Text:
i0-001
COMMENT
CL-00190
From:
Sent:
To:
Subject:
Michael Thomas
Saturday, January 16, 2010 2:21 PM
secretary < secreta ry@ C FTC. g ov >
Regulation of Retail Forex
Mr. Secretary,
I am writing in regards to the upcomming consideration of the regulation on forex brokers which
will limit the leverage they offer their clients to 10:1. I feel this would be a very poor decision on
the part of the CFTC. Leverage is a tool which gives individuals without massive funds the
opportunity to be successful in a market that, for most of its history, was limited to large banks
and corporations. By limiting this leverage you are removing this opportunity and once again
locking out approximately 90% or more of individual traders.
I understand the reasoning behind this particular regulation is to protect individuals from quickly
losing the money they have invested. Regardless of regualtions, however, there will always be
people who enter into a market without the knowledge and understanding they need to be
sucessful. These people will lose their investment, whether it be at a leverage ration of 100:1 or
10:1. The most likely result of this legistlation will be that these uniformed traders take their
gambling (and that is what they are doing) and move to poker, horse racing, or sports betting.
True traders, however, who have spend years learning how to utilize the tools at their disposal, the
least of which being a sizable leverage, will have lost the thing that allowed them to be sucessful in
the first place.
Beyond the effects on the individual trader, the tremendous business that retail forex has become
will be crushed. At a time when every business is still struggling to overcome recent economic
hardships destroying a whole industry would have very negative and long reaching effects.
Do not destory an indistury you are regulating. Do not harm the people your regulations are trying
to protect. Do not limit the opportunity that Forex gives by trying to stop foolish people from
making foolish decisions (because this is a lost cause).
I appreciate your careful consideration of this matter.
Sincerely,
MT
Hotmail: Powerful Free email with security by Microsoft.
Get it now.
