Comment for Proposed Rule 75 FR 3281
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From:
Simon Kloot
Organization(s):
Comment No:
2715
Date:
1/22/2010
Comment Text:
i0-001
COMMENT
CL-02715
From:
Sent:
To:
Subject:
Simon Kloot
Friday, January 22, 2010 1:20 PM
secreta ry < secreta ry@ C FTC. g ov >
Risks in reducing leverage to 10:1
Dear Sir/Madam,
This is an addition to my previous email regarding the proposed legislation from the U.S.
Commodity Futures Trading Commission that will reduce leverage on retail forex trading accounts
to
10-1.
As a retail forex trader, I do not keep my entire trading capital in my brokerage account. To do so
would be extremely risky.
Rather I transfer a proportion of my capital to and from my much safer bank account. My bank
account is protected by regulations that mean I would not lose my capital should the bank go
under.
To reduce leverage to 10-1 would mean
I would have to keep my entire trading capital in my
broker's account to satisfy margin requirements which is a very risky proposition. If the broker
were to go bankrupt, I would lose my entire capital, whereas if i had only placed a small
percentage of my capital in the account, I would not suffer an irreversible loss.
I hope you understand this concept and will keep the regulations as they currently stand.
Regards
Simon Kloot
