Comment Text:
i0-001
COMMENT
CL-05207
From:
Sent:
To:
Subject:
Nick Pandiscio
Monday, February 8, 2010 3:15 PM
secreta ry < secretary@ C FTC. g ov >
Regulation of Retail Forex
I am writing to oppose the proposed 10:1 leverage limit on retail foreign exchange trading.
Although this may seem like it would protect the small investor, in reality it limits our options by
requiring a larger account deposit.
Traders protect their equity in leveraged accounts through reasonable position sizing. For example,
if I wanted to risk no more than $100 per trade I could do so by trading either a $10,000 position
size with a 1% stop loss or a $100,000 position size with a 0.1% stop loss depending on my time
frame and market volatility. I manage risk by managing the trade.
Under your proposed requirements, I would need to have $10,000 deposited in my forex account
to trade a $100,000 lot size (instead of the $1,000 I must have deposited now.) This hurts me
because it does not allow me to diversify risk as well among multiple asset classes (right now I
could have that extra $9,000 available to trade in equities or futures, which allows me to diversify
among non-correlated asset classes.)
I urge you to reconsider this decision. It would hurt small traders like me, while giving large hedge
funds and investment banks a bigger advantage in the market.
Thanks,
NNick Pandiscio
