Comment Text:
i0-001
COMMENT
CL-04284
From:
Sent:
To:
Subject:
Rick Troj acek
Wednesday, January 27, 2010 5:01 PM
secretary
Proposed New Rules for Spot Trading Foreign Currency Markets
Dear Sirs:
I have been recently alerted by my broker that a ruling change is being sought with regard to leverage
ratios in the Spot Forex Market. While I support changes to increase the liquidity of Forex brokers and
their subsequent exposure, reducing leverage ratios from 100:1 to 10:1 will be devastating to spot
traders and brokerage firms and will be counterproductive. The Margin Call system of Forex Trading
by design reduces risk. It is unlike Futures or Stocks where a Margin Call can genuinely place a trader
in debt. As you know, the trader is not vulnerable whatsoever in this regard in Forex Trading. His/her
account may be, if it reaches Margin Call, it is simply closed and all trades exited by the broker in behalf
of the trader, and the trader can reenter the market later at any time with new funds.
I respectfully submit that this feature of Forex Trading be unchanged, and be allowed to remain as it
currently is. My request is framed on two possibilities. First, it will give an unfair advantage to
overseas brokers, and no regulation by the CFTC, and the currency market will die in the USA from a
Spot Traders perspective. Brokers and dealers will go broke unable to sustain enough active trading to
meet overhead against less regulated foreign brokers. The second reason is it will immediately place
undo financial hardship on current traders, forcing them to increase their capital by 10 or seek out a
foreign broker.
Sincerely,
Rick Troj acek
