Hello fellow traders. Did you guys hear about the CFTC’s proposed leverage changes? First the NFA FIFO regulations, then the lowering of max leverage to the existing 100:1 limit, now this!? What’s next? No leverage at all?
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, “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 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 Changes
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
If you feel strongly about the proposal, I encourage you to give the CFTC a piece of your mind. You may be able to help make an impact by sending comments directly to the CFTC at: firstname.lastname@example.org
Please include ‘Regulation of Retail Forex’ in the subject line of your message.
You can also submit your comments by any of the following methods:
* 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.
To find out more about this visit the CFTC’s website at:
I must admit that I really wonder if all our complaining will even make a difference – I tend to think not. They succeeded in pushing the FIFO rules, and also in lowering leverage to the current maximum of 100:1, so their recent change will most likely come into effect regardless of what we have to say. I don’t think they give a damn what the public thinks. The fact that they even attempted to “put it to the masses” as it were is just pure PR in my opinion.
The reality is that they’re regulators and without something to regulate and something for them to stick their noses into they are out of a job. Even though the retail forex industry had absolutely NOTHING to do with the subprime debacle they must do something right? They’re regulators so they must regulate, especially with the markets falling to pieces.
Or just maybe this is happening because of the jealousy of people in the Futures market (especially dealers) who’ve lost business to the retail forex industry.
Anyways, enough of my rant. Hey if you wanna chat and generally share your two pips with other traders regarding this topic jump on over to this forum thread:
Alrighty, now it’s time to get back to my charts.