Comment Text:
i0-001
COMMENT
CL-01905
From:
Sent:
To:
Cc:
Subject:
Andrew Sperazza
Thursday, January 21, 2010 2:49 PM
secretary
Stawick, David ; Smith, Thomas J.
; Bauer, Jennifer ; Penner, William
; Cummings, Christopher W.
; Sanchez, Peter
STRONGLY OBJECT TO 10-1 LEVERAGE LIMIT IN REGULATION OF
RETAIL FOREX PROPOSAL RIN 3038-AC61
Attn : David Stawick, Secretary, CFTC and ALL CFTC policymakers
As a non-affiliated US-based Retail FX trader, please note for the record that I am STRONGLY
OPPOSED to the 10-1 leverage limit as proposed in RIN 3038-AC61 relating to the Regulation of
Retail Forex.
Counter-productive effects
This senseless limit would in NO way protect, aid or benefit me but rather would greatly harm me
since this restriction, if passed,
¯ would require that I submit substantially more margin-funds into non-protected, non-FDIC
insured, non-SIPC eligible accounts, actually exposing me to increased risk in the event of
bankruptcy of my Forex Broker.
¯ would NOT divert my business into regulated-Futures trading (as the CFTC is probably hoping),
but rather would cause me to seek an unreliable, higher-risk offshore FX broker to trade through,
whose practices might be questionable.
¯ would eliminate one of the greatest benefits of trading Forex : My ability to efficiently deploy my
own trading capital in the way that I choose.
Lower FX vols require far greater leverage
FX volatilities are generally substantially lower than in the Equities or Futures market. Therefore,
significantly more leverage is required simply to capture equivalent trading opportunities.
I do not want the CFTC to force me to trade how I choose. While 100-1 leverage is available to me
- should I choose it - I am never forced to use it.
The bottom line is that OTC Retail Forex trading is NOT Futures trading. Please do not try to treat it
as such!
Forex Trading at high leverage is very beneficial to the US, and it's long term
interests. We as Americans, lose significant competitive advantages to traders in other
countries, our accounts would very quickly be much smaller, and therefore the power
base would quickly shift outside of America, to places like Russia, China, where technical
talent coupled with high leverage, allows their accounts to grow at rates individuals, and
soon after companies would simply not be able to compete with the power you are giving
them.
There absolutely is no risk in foreign exchange the way it is, however cutting the
leverage so low, will have the equivalent effect of purposefully devaluing the US housing
market.i0-001
COMMENT
CL-01905
PLEASE IlqlqEDIATELY STRIKE ANY PROPOSED 10-1 LEVERAGE LIlqITATIONS.
Don't let proposal RIN 3038-AC61 become an expensive lesson in unintended consequences ....
Thank you.
Andrew Sperazza
[email protected]
(800)
930-9256 ext
500
