Comment Text:
i0-001
COMMENT
CL-03004
From:
Sent:
To:
Subject:
[email protected]
Friday, January 22, 2010 8:16 PM
secretary
Public Comment Form
Below is the result of your feedback form. It was submitted by
([email protected]) on Friday, January 22, 2010 at 20:15:57
commenter_subject: Reduced Leverage in Retail FOREX RIN 3038-AC61
commenter frdate: 1/13/10
commenter frpage: RIN 3038-AC61
commenter comments: Attention David Stawick,
I am writing you to express my extreme disapproval
of the proposed rule changes you want to make to
retail FOREX trading. I cannot imagine the real
reason you want to do this. I assume you are
telling people the reason is you want to make it
safer for the average person to trade FOREX by
lowering the available leverage, thus, in theory,
lowering the maximum amount of money one can lose
while trading. While it may be true that there are
citizens of the U.S. who do not understand the
concept of leverage well enough to be trading, yet
these people trade anyway and many of them lose
money. Where do I start on why this plan is so
wrong?
1. People who trade without fully understanding
leverage will lose money because they most likely
do not understand how to be a successful trader.
Leverage is just one small piece of the pie. Even
if you lower leverage to 10:1, and they some how
still have enough money to fund their accounts to
trade at that leverage, they will still lose their
money for a million other reasons.
2. Taking away my freedoms and all other traders'
freedoms to protect people who should not be
trading in the first place is anti-capitalist and
anti-american. It's the equivalent of prohibiting
stores from selling sharp knives because once in a
while some one cuts themselves by behaving
irresponsibly.i0-001
COMMENT
CL-03004
3. Traders will be more likely to experience more
margin calls at 10:1 leverage than 100:1 leverage
for the simple fact that most retail traders do not
have $100,000 to fund an account with to trade the
same way they were trading at 100:1 leverage with a
$10,000 account. This new rule would punish many
currently responsible and profitable traders
because of this issue.
4. You would take away the main income and side
income of tens of thousands if not hundreds of
thousands Americans by stripping them of their
ability to trade they way they are trading right
now. Not only would traders lose their income, but
brokers would go out of business, or at best
downsize, do to the sudden lack of business and
thousands of people would be put directly out of
work.
5. Some traders may move their accounts off shore
to continue to trade. But the mass reduction in
trading will impact the markets' behavior and could
render many trading systems ineffective. Traders
would only figure this out after many consecutive
losses. That translates into lost money, as well
as the lost time and effort developing those now
useless trading systems.
In the first paragraph I said I cannot image the
real reason you want to make these rule changes,
specifically the leverage reduction. I say this
because these 5 points I mentioned above are quite
obvious. I doubt you rode the short bus to school
while wearing a helmet. I'll bet you are of above
average intelligence. I'd also bet you realize the
impact of reducing the maximum leverage in retail
trading would be catastrophic to the industry, at
least in the US. Much like the "First In First
Out" rule, the reduced leverage does nothing to
help us retail traders. Unlike the "First In First
Out" rule, which is reduced to an annoyance by
clever work-arounds, reduced leverage will most
likely destroy my ability, along with countless
other traders' ability, to continue trading.
What is the real reason you want to reduce
leverage? Do you have even one letter or email to
support this rule change? Who exactly supports
this rule change and why?i0-001
COMMENT
CL-03004
Sincerely,
Nathan Wyss
commenter_name: Nathan Wyss
commenter ~vithhold address on: ON
commenter_addressl : 5111 Telegraph Ave #327
commenter_city: Oakland
commenter state: CA
commenter_zip: 94609
commenter fax: 510 827-5889
commenter~hone: 510 827-5889
