Comment Text:
i0-001
COMMENT
CL-06481
From:
Sent:
To:
Subject:
Steve T Gutke
Sunday, March 7, 2010 1:43 PM
secretary
Regulation of Retail Forex
Dear Mr. Secretary,
Regarding RIN 3038-AC6:~,I believe that either an increase in margin requirements or a decrease in maximum
leverage ratio makes sense for retail investors (including myself). However, implementing both do not make logical
sense which I shall explain. The purpose of margin is to cover the average daily FX loss (based on average daily
price volatility). If the leverage is reduced 10-fold to the proposed 10:1 then potential maximum losses would be
reduced by 10 times and as a result, the amount of margin needed would be reduced by 10 times. However, in
order to be conservative and increase the safety of our financial markets, we should keep the current margin levels
rather than lowering them by a factor of 10.
Alternatively, you could raise the margin requirements and keep the current mamximum leverage ratio. However,
my preference is to decrease the maximum leverage ratio to the proposed 10:1 because this directly reduces the
maximum possible loss to the investor which directly impacts the small investor's ability to meet margin
requirements in the first place.
Thank you for your time on this important matter.
Sincerely,
Steve Gutke
