CFTC Screwing the little guy
For any of you not aware of this here is the letter I received from one of my brokers today:
"Dear Valued Customer,
As many of you are aware, the U.S. Commodity Futures Trading Commission (CFTC) announced on January 13, 2010 that it is seeking public comment on proposed regulations concerning retail Forex trading.
As part of the proposed regulations, it is stated: “leverage in retail forex customer accounts would be subject to a 10-to-1 limitation,” which means 10:1 leverage would be the maximum amount allowed for all Forex traders in the U.S.
An example of how the proposed regulatory restrictions would affect a major currency pair appears below:
Maximum Leverage under Current Regulations Maximum Leverage under Proposed CFTC Changes
USD/CHF USD/CHF
100:1 leverage (one percent) 10:1 leverage (10 percent)
1 lot (100,000) 1 lot (100,000)
Margin requirement: $1,000 Margin requirement: $10,000
We stand behind the belief that you should be given the freedom and right to choose the amount of leverage that is appropriate for your individual desired risk, and that this basic principle of ‘choice’ is in jeopardy by the proposed CFTC regulations.
If you feel strongly about the proposal, we encourage you to help determine the outcome of these proposed regulations. You can help make an impact by sending comments directly to the CFTC at: <[email protected]>.
Please include ‘Regulation of Retail Forex’ in the subject line of your message and the identification number RIN 3038-AC61 in the body of the message.
You can also submit your comments by any of the following methods (include above ID number):
- Fax: (202) 418-5521
- Mail: David Stawick, Secretary Commodity
Futures Trading Commision 1155 21st Street, N.W.,
Washington, DC 20581 - Courier: Use the same as mail above.
In the upcoming days, Interbank FX and the rest of the U.S. Forex Dealer Coalition will be releasing a more formal opinion about the proposed changes. Please feel free to read further details about the regulation on the CFTC website by clicking here. In the interim, we encourage you to voice your opinions to the CFTC and your local U.S. representative.
As always, we want the best for our traders. We hope you’ll join forces with us to prohibit the proposed leverage requirements.
The Interbank FX Team"
This would be huge if it goes through. They already changed the leverage to be a maximum of 100 to 1 here in the US which is what I believe drove my favorite broker out (FXPro) of the US. It they put this in it could be bad for all of us that trade for beer money after our regular jobs. Basically will be going from making a few dollars to a few pennies. I highly suggest all the traders whose accounts are not over $10,000 write an e-mail saying this is an attack on the retail trader which would basically set things up so only the semi-wealthy or better could make money trading forex.