Comment Text:
i0-001
COMMENT
CL-04725
From:
Sent:
To:
Subject:
Peter Fontana
Monday, February 1, 2010 12:43 PM
secretary
Proposed Margin Regulation for Retail Forex
Mr. David Stawick
Secretary
Commodity Futures Trading Commission
Dear Mr. Stawick,
I am responding to the proposed revision of the Forex margin requirement (RIN 3038-AC61). I very much object
to the proposal to change the margin for Forex trading from 100:1 to 10:1. This proposal would be devastating to
Forex traders. A Forex trade is a zero sum transaction as the amount on the long side is offset by the short side.
There clearly must be some margin deposit to protect both sides of the transaction. Many trades are hedging
transactions and therefore even with 100:1 marging very low risk trades. Not very long ago a 400:1 margin was
offered by many Brokerage firms. For some traders this could result in them being out of margin in a short period
of time. I think that the current 100:1 margin is adequate protection for all involved. If this proposal were adopted
many traders would move their accounts to foreign Brokerage firms where 100:1 margin would continue to be
offered. Unfortunately a number of foreign firms use shady business practices and the traders equity could be
lost. I urge you not to change the 100:1 margin requirement.
Sincerely,
Peter R. Fontana
[email protected]
