Comment Text:
i0-001
COMMENT
CL-03708
From:
Sent:
To:
Subject:
Bernard J. Stankay
Monday, January 25, 2010 6:19 AM
secretary
Regulation of Retail Forex
identification number
RIN 3038-AC61 in the body of the message.
Dear Sir or Madame:
I write with concern over the proposed regulation. I am assuming that one intent of this proposed
regulation is protection for the small retail customer. Being a small retail customer, I just want to
emphasize that higher leverages that I have used, up to 100:1, have not adversely affected me. I think
the issue should not be leverage limitations but sound education which I have undertaken prior to
trading. While warnings are provided, I personally believe some form of free (not more cost burden to
the small trader) education should also be provided and it isn't. Therein lies the problem. If you
understand the risk and know how to manage it, and if you have a reasonable understanding of trading
systems and methods as well as econimic fundamentals, a 100:1 leverage is an opportunity, not a
gamble.
I take currency trading very seriously and I approach it as such. It is a serious opportunity to earn
money. As you know, small retail traders don't earn much even at 100:1, and even at that
leverage small earnings are quite time consuming. If the maximum leverage was reduced to 10:1,
I
would likely not trade because of the shear amount of time required to earn anything at 10:1, thus losing
income opportunities. Also, if expensive educational requirements were mandated, I could not afford
them. I would be eliminated from the opportunity, thus relegating this opportunity to the wealthy only.
Furthermore, with flexible leverage, people have a choice. They don't have to trade at 100:1 and they
know that if the knowledge is properly disseminated. In currency trading, you can be limited to not lose
more than you put in. That limitation already exists and should be manadated if it is not enforced.
The bottom line is that with flexible leverages, one can choose. With higher leverages, trading becomes
an opportunity for the small trader. Proper education is essential; that is what reduces risk. Reducing
risk by eliminating the opportunity defeats the purpose and diminishes the market balance and its
liquidity. Above all that would hurt, not help, the small trader.
Please consider these comments.
Sincerely,
Bernard J. Stankay
