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10:1 could be the new leverage rule
- Thread starter Surprise
- Start date
Quote from opt789:
Look at the margin of CME currency futures like 6E (EUR/USD), it is currently $4050 to hold an overnight contract. That is excessively more than 10 to 1.
I agree with that and when they made the last rule this past Nov. about the 100-1 margin for majors and 25-1 for the exotics, they say they wantesd to keep it inline with the imm futures like you mentioned above. But the 10-1 is ridiculous. I am not sure if we are allowed to comment as retail traders to the cftc but I am going to find out and when I do I will post.
Quote from opt789:
Believe me I wonât argue with you, $4k is much too low for a swing trade, but for short term day traders it is probably not that big of a deal. 100 to 1 is too much, 10 to 1 is too low.
fair enough. equally i won't argue about 10:1. i was mentioning that 20:1 seems more reasonable...
The question I have is that would American use foreign firms to trade then?
I guess it will take few months untill they make up their minds , and it is for spot forex not futures i guess ...Quote from Simex:
Excuse me. How long would this take to be implemented?
Would brokers still offer very low margin for day trading? What would the IM be for daytrading something like 6E?
Cheers.
new leverage rule for spot FX needs tweaking if it ever becomes implemented.
They should impose tighter leverage on those trading more lots per position bcuz THEY are the ones that have the power to move the market at will.
Heres an example of the concept:
500-1000 lots per trade --> 5: 1 leverage
250-500 lots per trade -- > 10:1 lev-----
125-250 lots---------- --> 20:1 lev-----
67- 125 lots---------- --> 30:1 lev-----
35-67 lots---------- --> 40:1 lev-----
17-35 lots---------- --> 50:1 lev-----
8-17 lots---------- --> 60:1 lev-----
4-8 lots---------- --> 70:1 lev----
2-4 lots---------- --> 80:1 lev----
1 mini - 2large lots----- --> 100:1 lev
Im in no way saying those are the values that should be used, but you get the idea....
....feel free to give your opinions on this type of leverage scale
They should impose tighter leverage on those trading more lots per position bcuz THEY are the ones that have the power to move the market at will.
Heres an example of the concept:
500-1000 lots per trade --> 5: 1 leverage
250-500 lots per trade -- > 10:1 lev-----
125-250 lots---------- --> 20:1 lev-----
67- 125 lots---------- --> 30:1 lev-----
35-67 lots---------- --> 40:1 lev-----
17-35 lots---------- --> 50:1 lev-----
8-17 lots---------- --> 60:1 lev-----
4-8 lots---------- --> 70:1 lev----
2-4 lots---------- --> 80:1 lev----
1 mini - 2large lots----- --> 100:1 lev
Im in no way saying those are the values that should be used, but you get the idea....
....feel free to give your opinions on this type of leverage scale