Comment Text:
i0-001
COMMENT
CL-00095
From:
Sent:
To:
Subject:
[email protected]
Friday, January 15, 2010 2:54 PM
secretary
Public Comment Form
Below is the result of your feedback form. It was submitted by
([email protected]) on Friday, January 15, 2010 at 14:54:05
commenter_subject: Forex Leverage
commenter comments: While I understand the intent to limit the amount
of leverage in the retail spot forex market, I
implore you to maintain flexibility for traders to
have the ability to place relatively small deposits
with brokers. Since there is no FDIC or SPIC
insurance, I'm personally not comfortable placing
large amounts of money at forex brokers no matter
how well capitalized they appear to be. Forex
accounts held at Refco were tied up for long
periods of time during the bankruptcy procedures
which if a trader had a majority of their trading
funds deposited there, they would effectively be
put out of business. I also believe that they were
the only accounts that lost money (could be wrong
on that). If you impose a too restrictive leverage
requirement, the traders with limited accounts will
just open their accounts at an overseas broker
which places their limited resources at greater
risk. I agree that the 400 to 1 and even the 200 to
1 accounts are ridiculous, however 100 to 1 may be
reasonable if a trader wants to employ multiple
strategies (some of which hedge other positions),
the trader has other risk money that he/she doesn't
feel comfortable having on deposit with the broker,
the trader has a scalp methodology and wants to use
a higher leverage based on his/her preset risk
(stop) still within a level that employs sound
money management principles (maybe risking 1% - 3%
per trade), etc. Thank you for your consideration
of my comments.
commenter_name: Stephen Fox
commenter withhold address on: ON
commenter_phone: 646 536-4057
