Comment Text:
Retail forex needs to be protected as well as the futures market. Here are my two proposals:
1) customer segregated funds. As of now, retail forex does not have customer segretated funds. Nor a way to enforce customer segregated funds.
2) Insurance on these segregated funds. This insurance does not have to be controlled by the gov't (it can be private insurance), but must prove that they are capable of issuing payouts. Claims should be settled within 60 days (30 days preferred) for traders. The insurance should cover against either fraud or bankruptcy.
It is important to note: Do not confuse protection for restriction. Please stop limiting retail forex leverage to 1:50 and preventing US residents from being able to trade with forex brokers outside of the USA. Restricting people's right to choose does NOTHING to protect them. It just makes them more resentful of their parents.
Futures CME eurodollar contract, with exchange issued margins, 1:1200-1:2000 leverage. You can view this here and do the calculations yourself.
http://www.cmegroup.com/trading/interest-rates/stir/eurodollar_contract_specifications.html
http://www.cmegroup.com/trading/interest-rates/stir/eurodollar_performance_bonds.html
Take the total contract size value ($1,000,000 USD) and divide that by the required margin (between $450-850 depending on how far out the contract month is). Do you have any plans to shut down the CME, ban the Eurodollar futures contract, or cap their leverage?
