Comment Text:
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COMMENT
CL-06757
~rol~l:
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Subject:
Attach:
[email protected]
Thursday, March 11, 2010 12:49 AM
secretary
Public Submission for 2010-00456
Public Submission for 2010-00456.zip
Please refer to the attached file.Please Do Not Reply This Email.
Public Comments on Regulation of Off-Exchange Retail Foreign Exchange Transactions and
Intermediaries:
Title: Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries
FR Document Number: 2010-00456
Legacy Document ID:
RIN: null
Publish Date: Wed Jan 20 00:00:00 EST 2010
Submitter Info:
first_name Timothy
last name Price
address1 332 Newberry Street
city Grand Prairie
country United States
us state TX
zip 75052
company
Gentlemen,
I am writing to comment on the proposal to restrict leverage in Forex trading to 10 to 1
leverage contained in these proposed rules.
I speak as someone who trades the Forex for a living, as a private investor.
The effect of the proposed rule would be to destroy the US market for small traders like
myself and to drive my trading to foreign brokers who do not impose such a restriction on
leverage.
It would do so by creating an unacceptable risk reward ratio and make the cost of trading
prohibitive to me and others like me.
In addition, many investors would be forced to use foreign brokers who are not subject to the
reserve funds requirements of US brokers & the risk of brokerage failure or even
unscrupulous behaviour by foreign brokers will be far higher.
The forex market is inherently less risky than other equities markets as one cannot risk more
than the capital contained in ones trading account. There is no such thing as a "margin call"
in Forex. My broker will automatically exit my positions on my behalf if my capital falls below a
certain amount & I cannot owe any more than the amount in my account.
I have traded Stocks, Options, and Commodities and I can state from hard experience that
even with a maximum leverage of 2:1 (using margin) it is possible to lose far more than the
balance of one's trading account.
Forex is a fundamentally different market than Stocks, Options, or Commodities and should
not be subject to the leverage requirements of those other markets.
I urge that the proposed rules do not implement a 10 to 1 leverage requirement for Forex
trading.
