Comment Text:
i0-001
COMMENT
CL-07530
From:
Sent:
To:
Cc:
Subject:
Paul
Sunday, March 14, 2010 9:23 PM
secretary
[email protected]
Objection to reduction in forex leverage
I am informed that there is a plan to reduce leverage on foreign exchange trading in the US from 100:1
to 10:1.
This seems to assume that forex trading has the same level of volatility as share CFD trading, which is
far from the case. It is quite common for a share price to move 5% in one day, whereas a daily currency
pair move of 0.5% is considered large. Forex leverage of 100:1 is therefore similar in risk to share CFD
trading at 10:1 leverage.
A forex leverage of 10:1 would reduce the return on my investment by a factor of 10, and I would
immediately be forced to transfer my business to a broker in another country.
Paul Hampton-Smith
Adelaide, SA, Australia
