Comment Text:
i0-001
COMMENT
CL-06427
From:
Sent:
To:
Subject:
J. Bailey
Saturday, March 6, 2010 8:37 PM
secretary
'Regulation of Retail Forex
RE: RIN 3038-AC61
It has come to my attention that the U.S. Commodity Futures Trading Commission is considering limiting retail
forex customer accounts to a 10-to-1 leverage limitation. To my knowledge there is no crisis or public outcry that
would warrant such regulation, therefore you must have some plausible reason to justify such action. (My only
guess is "to protect the consumer".)
First,
forex is not anywhere near the
same as
commodity futures trading and should not be subject to the
same
leverage limitations!
I, like thousands of others, am a small-capital investor who makes a decent living in forex trading. With an initial
risk capital of only $5,000 in a customer account I have enjoyed modest financial success using 100-to-1
leverage and a conservative money management strategy.
If, however, you limit leverage to 10-tol, I would have to risk $50,000 to achieve the same level of income.
That makes absolutely no sense! (Unless, of course, it is your intention to drive "the little guy" out of the forex
trading market.)
As you can see, if your intention is to limit risk by limiting leverage, you would accomplish exactly the opposite
effect!
That's the problem with regulations--They tend to generate unintended consequences.
I am writing on behalf of the many thousands of small-cap U. S. forex traders who will be driven out of business if
you limit leverage.
We know the risks. The risks are published. We don't need well intentioned regulations to save us.
J. A.
Bailey
San Angelo, TX 76904
