Comment Text:
i0-001
COMMENT
CL-02738
From:
Sent:
To:
Subject:
Ann Sinclair
Friday, January 22, 2010 2:13 PM
secretary
10:1 Leverage
To Whom It May Concern:
Reducing leverage to 10:1 on US accounts is not a solution for "protecting"
investors. Rather it serves to effectively reduce one of the few remaining liquidity
opportunities for individuals who have smaller accounts from which to work, and
further restrict retail traders from market participation. It will serve to drive more
accounts offshore, and increase the already restrictive nature of trading under US
rules.
There is already a safety mechanism in place in the FX market; the lot size
positioning, which can reduce risk effectively, and is controlled by the trader, not
the regulator.
If CFTC wishes to address risk management, it should aggressively enlist or
regulate brokers in restricting lot size relative to account size through education
and broker participation. For example, no trader with an account smaller than 10K
should be trading standard lots as a rule; rather trading lesser sizes until their
account can manage the risk required for full lot trading.
FX is not the equities market. It is a different market, and as such must be
managed differently. Low leverage is not the answer. Proper, educated risk
management by the individual trader is.
Ann Sinclair
