Comment for Proposed Rule 75 FR 3281
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From:
Peter Grossman
Organization(s):
Comment No:
3087
Date:
1/23/2010
Comment Text:
i0-001
COMMENT
CL-03087
From:
Sent:
To:
Subject:
Peter Grossman
Saturday, January 23, 2010 12:18 AM
secretary
Regulation of Retail Forex
Dear Secretary,
About four years ago, I had a decent size retail forex account with Refco FX, maybe about 35K or so; all my
eggs were in one basket.
Refco Fx went bust and I settled for about 21 cents on the dollar; not a pretty picture.
Today, I have four separate small FX accounts with different brokers; I never let any one these account grow
above 12K.
Instead, I skim profits when needed for income and savings. This is how I distribute my "rogue broker" risk;
multiple accounts with anywhere from 100:1 to 100:2.5 leverage.
This high leverage allows me to maintain and trade these multiple accounts with relatively low balances, never
exceed usage 10% account equity for any one trade, and risk no more 1-2% loss for any trade.
This is how I manage trade risk and broker risk. I keep the risk small and spread it around. 1-2% leverage is
essential for such a program.
By reducing margin, funds become consolidated into fewer larger accounts, into fewer larger brokers and
into fewer larger banks, until there are only a few big players left to distribute risk.
Eventually, too big to FAIL will become too big to BAIL!
I subsist on small accounts and managed leverage; the risk is to me and my small accounts, Not the entire
financial system.
Sincerely,
Peter Grossman
