Jason can I ask you to request one point of clarification. If FXCM were to cease being an NFA regulated interest in the US, *then* would there be some CFTC or NFA regulation or limitation on US citizens ability to trade with your UK interest? If not it sounds like this broker rep was grossly missinformed.
10:1 could be the new leverage rule
- Thread starter Surprise
- Start date
So there is at least one person at ET who understands that leverage is not the same as risk.
I just skimmed through the full text of the proposal. Alot of it makes actually sense to me (apart from the 10:1 limitation). As for the leveragle limitation, they have 2 arguments.
The first one is essentially consumer protection, to limit the customers risk they can expose themselfs, limit their losses or even negative account balances. Much like the 4:1 limitation in equities i suppose.
In the second one they argue that in on-exchange trading there is a central counterparty and an obligation for FCMs to have enough funds segregated to pay all customers credit balances at once. None of this is the case for retail FX, and thus its a more risky operation and therefore requires a higher security deposit(that's what they call margin) - so that in case of a bankruptcy more customer funds will remain to cover client claims.
The first one is essentially consumer protection, to limit the customers risk they can expose themselfs, limit their losses or even negative account balances. Much like the 4:1 limitation in equities i suppose.
In the second one they argue that in on-exchange trading there is a central counterparty and an obligation for FCMs to have enough funds segregated to pay all customers credit balances at once. None of this is the case for retail FX, and thus its a more risky operation and therefore requires a higher security deposit(that's what they call margin) - so that in case of a bankruptcy more customer funds will remain to cover client claims.
That's a complete crock. A lot of forex dealers use straight through processing and the counterparty is a bank. And in any case they already used that argument to hike up capital requirements to $20 million! I smell politics here folks. They want to push forex traders on exchange. Don't let them do it!
Email secretary@cftc.gov now! Tell them you are perfectly happy trading with 100:1 leverage and that the government has no business interfering with your trading.
There's a few of us. This is trading 101 stuff. CFTC is playing politics.
The gov't is hell bent on limiting risK:
http://www.marketwatch.com/story/obama-likely-to-propose-size-limits-on-banks-wsj-2010-01-20
Like I said before, the real question right now is by how much the UK divisions reduce their leverage buying power
Hopefully, they won't
This 10:1 thing is almost a sure thing
http://www.marketwatch.com/story/obama-likely-to-propose-size-limits-on-banks-wsj-2010-01-20
Like I said before, the real question right now is by how much the UK divisions reduce their leverage buying power
Hopefully, they won't
This 10:1 thing is almost a sure thing
Yeah, say that to people who use moving averages. Trading gaps in the stock market skews your moving averages. So, you can't work with them for various time frames.
Every demo trading platform I've tried shows you the profits and losses in real time. The only people who would ignore that are in denial.
Jason Rogers
ET Sponsor
Sure, will see what info I can get.
Keep those comments coming everyone. We can stop this rule if you all make your voices heard. Contact secretary@cftc.gov today and tell them keep leverage at 100 to 1!
Look how many people have commented already:
http://www.cftc.gov/lawandregulation/federalregister/federalregistercomments/2010/10-001.html
Look how many people have commented already:
http://www.cftc.gov/lawandregulation/federalregister/federalregistercomments/2010/10-001.html
Socialism sucks.