Comment Text:
i0-001
COMMENT
CL-05110
From:
Sent:
To:
Subject:
Attach:
Michael Serpico
Sunday, February 7, 2010 9:46 AM
secretary
Industry Filings: Comments on Industry Submissions: Regulation of Retail Forex
RIN 3038-AC61 comments.docx
Dear Secretary,
My comments on RIN 3038-AC61 are provided in the attached document. In summary, I urge you to abandon the proposal
to limit forex leverage on the grounds that it will limit people from a legitimate source of self employment and strip students of
the market of a way to learn about trading from a hands on approach.
Thank you for your time,
Michael Serpico1801 Buttonwood St. Apt 217
Philadelphia, PA 19130
2/6/2010
David Stawick, Secretary
Commodity Futures Trading Commission
1155 21st Street, N.W.,
Washington, DC 20581
Dear Mr. Stawick,
Please consider abandoning the proposal to limit retail forex leverage to 10:1. The forex market
provides individuals with an entrepreneurial opportunity to support themselves and provides an avenue
for individuals to learn about the derivatives markets' nature, risks, and operations. By limiting the
leverage to 10:1, many otherwise smart, calculating and prudent individuals will be unable to gain the
educational and financial benefits the forex market can provide. The rule could then ultimately lead to a
marginal increase in the general population's ignorance of the marketplace and unemployment via
former participants' inability to trade.
The retail forex market allows many skilled individuals with the ability to become confident self-
employed workers or at least provide them with supplemental income. By increasing leverage
requirements, participants' equity accounts will be unable to support the same number of contracts per
trade. They will either have to abandon their source of income or trade without proper risk -reward
ratios in an attempt to match the income they were generating when their accounts could support
multiples contracts. This will lead to participants risking more money than is prudent or forcing
customers to look elsewhere for the ability to trade.
The forex market also allows young, budding students of the market to get a hand on approach to
understanding how the market works while only risking limited amounts of capital. Concepts, like
leverage, slippage, bid-ask spread and many others will only be fully understood through genuine
experience and sometimes financial loss. These experiences make the participants more knowledgeable
and ultimately better off to pursue careers in the finance sector and keep a keener eye on their personal
finances. Participants who do not heed these lessons and choose to risk more money are doing nothing
more than gambling and will squander their money elsewhere regardless of the leverage requirements
imposed.
Once again, I urge you not to pass a proposal limiting the leverage of retail forex transactions. This
proposal will do little to stop the reckless participants squandering money and only hurt the smart,
knowledgeable traders that have done nothing wrong.
Thank you,
Michael Serpico
