Comment Text:
i0-001
COMMENT
CL-05767
From:
Sent:
To:
Subject:
Sandro
Wednesday, March 3, 2010 8:08 PM
secretary
Regulation of Retail Forex
Dear CFTC officers,
It is with mixed feelings I am writing you this e-mail. I was hoping this day will not come. I must say that in a way
the lowering of leverage was somewhat insulting, as it seems that we, as traders, do not deserve the confidence
to be granted freedom.
The 10:1 leverage restriction is, in my opinion unwise. First of all, I am mailing you from Croatia, and I trade
currencies under forex.com. Neither I nor forex.com are in any essential way connected to the US, nor is any
other financial institution since the advent of free trade, so in a way, the whole issue is totally gone around me.
We, as traders, will find a way to trade higher leverage elsewere, but there we do profit from firm American
regulation, and I am willing to pay the dealer its fees, who in turn pays taxes to the US for that extra security.
I believe the only thing that will be archieved by this in a completely globalized market is to pour out capital from
the US, and force the reallocation elswere like the UK, or Russia, or Continental Europe. Rest assured that there
is no feaseable way, asides from expropriation of individual property by the state to control were one individual
will deposit her money. So this part of me is completely against the higher margin requirements.
On the other hand, most serious traders, myself included, do not in reality use more than 10:1 leverage (ok, for
formal reasons I use more when short in GBP/USD, and this is why I would suggest a compromise of 20:1
leverage). But alltoghether, I do not trade more than one mini contract (10000 units) for every 10005 in my
account, and I do not think there is a reason for anyone to trade more. This part of me thinks that the lowering of
leverage is a good thing since it will force discipline and patience on many people who try and do not succed
otherwise. But in this view, we are, so to speak trying to baby-sit people who are often way to old for such
treatment, and should be held responsible for their own actions.
In any case, I belive that freedom should not be restrained, but as you have so far offered great guidance and
have never failed to provide the people who deserve it the possibility to earn and prosper, I support you no matter
what the decision will be. But in my opinion, it should be kept at 20:1, if lowered.
I call to reason, please do not lower the leverage excessively, since you will not be doing us a favor, but creating
a problem. I find the problem of short vs. long leverage especially problematic, so please take a look into that!
All the best,
Sandro Skansi, MA
