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Could 10:1 be the new leverage in US Forex?

  • #701
  • Mar 1, 2010 11:35pm Mar 1, 2010 11:35pm
Quoting wwwin
I guess forex factory, lol..."everything thru a clearing house"...the end of US retail as we know it is coming to an end....FXDC members are gonna be dinosaurs...the only question is whether or not they are going to be able to coerce foreign brokers into submission, like Alpari UK succumbed
At least theres a few brokers willing to take US traders up to the point that it becomes illegal, I dont really see there being a law that would prevent US traders from investing overseas. I also dont think that the NFA had anything to do with alpari not taking US clients, I think its more of an issue of "washing there hands" and not wanting to deal with potential BS coming from the NFA.
  • #702
  • Mar 2, 2010 11:42am Mar 2, 2010 11:42am
I received this link on another thread. For anyone interested in signing an electronic petition against the CFTC's leverage involvement on retail forex.

Don't know if it is a good idea or not, but I think it cannot hurt.

http://www.petitiononline.com/stopcftc/petition.html
  • #703
  • Mar 2, 2010 11:47am Mar 2, 2010 11:47am
Quoting andy9775
I dont really see there being a law that would prevent US traders from investing overseas.
Refer to post #612 for your answer to that one.
  • #704
  • Mar 2, 2010 12:33pm Mar 2, 2010 12:33pm
Has the decision been made to do what they were planning or are all americans already on their way to overseas brokers?
  • #705
  • Mar 2, 2010 6:09pm Mar 2, 2010 6:09pm
Quoting pipnu2me
Refer to post #612 for your answer to that one.
I dont see how that a law preventing you from investing overseas.
  • #706
  • Mar 2, 2010 8:57pm Mar 2, 2010 8:57pm
That is right, that is just an IRS reg, that if you have a foreign account that at any time during year had 10K, then you have to report it that's all that is, it presupposes that you are able to have a foreign account in order to report it.
  • #707
  • Mar 2, 2010 10:21pm Mar 2, 2010 10:21pm
Quoting kodflakes
Has the decision been made to do what they were planning or are all americans already on their way to overseas brokers?
Seeing as how public comment lasts until March 22, no.
Hindsight is 20/20
  • #708
  • Mar 3, 2010 4:59am Mar 3, 2010 4:59am
How very fascinating... NFA met with Commissioner Sommers last week - were they summoned or did they invite themselves to ply the case because they feel like they are losing the battle?

http://cftc.gov/ucm/groups/public/@l...10-001b002.pdf

I rather like Sommers, she is on the board of the Finanical Literacy and Education Commission and she's a political animal... rose through the ranks of political internship. If any of the Commissioners will be the trader's friend in this, it's her.

http://cftc.gov/aboutthecftc/commiss.../jsommers.html
  • #709
  • Mar 3, 2010 11:40am Mar 3, 2010 11:40am
Quoting andy9775
I dont see how that a law preventing you from investing overseas.
it doesnt. but it does raise a flag--probably a good idea to talk with your accountant about it.
  • #710
  • Mar 3, 2010 2:40pm Mar 3, 2010 2:40pm
A slightly positive news on 10:1 leverage being challenged by House Law makers...Looks like our comments/petitions are being heard.

House Lawmakers Concerned On CFTC Retail Forex Leverage Proposal

By Sarah N. Lynch Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. House lawmakers Wednesday raised concerns a proposal by the Commodity Futures Trading Commission could have negative consequences for the U.S. retail foreign exchange market.
Several lawmakers at a House Agriculture farm commodities subcommittee hearing Wednesday grilled CFTC Chairman Gary Gensler about a provision in the commission's proposal that would restrict retail forex investors to a 10 to 1 leverage ratio, thereby forcing them to post much higher collateral.
"I don't get what we are trying to accomplish here by lowering this to 10 to 1," said House Agriculture Chairman Collin Peterson (D., Minn), saying the proposal appears to put investors' money even more at risk. "Who are you trying to protect here?"
The leverage plan is part of a broader CFTC proposal that seeks to implement new powers Congress bestowed on the agency in 2008 to help police against foreign currency fraud targeting "Mom and Pop" investors in the niche retail foreign currency market.
The CFTC's retail foreign exchange proposal would require brokerage firms and their sales teams to register with the CFTC and abide by new reporting, capital and leverage standards.
But the leverage piece of the proposal is inconsistent with current rules in place by the self-regulatory National Futures Association, which on certain common currencies allows traders to use leverage up to 100 to 1. In parts of Europe, meanwhile, there are no leverage restrictions and U.S. banks that offer retail forex trading would not be covered by the CFTC's regulations, either.
So far the proposal has met with fierce resistance, both by forex dealers and individual traders who are concerned about the leverage ratio.
House Agriculture member Jim Marshall (D., Ga.) told Gensler he didn't think Congress intended to "kill the market" when it gave the CFTC more power over retail forex.
"If our leverage rules are 10-to-1 and leverage rules elsewhere are 100-to-1, the business is going to move elsewhere," Marshall said, adding that investors could be even less protected if business moves to a country with lax regulations.
Gensler told lawmakers the intent of rule is to "protect the public" and the agency is still reviewing the more than 5,600 comments it has received. Most of those comments, he said, pertain to the leverage issue.
He also addressed a concern by some about a dueling proposal current being floated by the Financial Industry Regulatory Authority, the self-regulator for securities brokers, which would cap leverage for retail forex at a stricter 4-to-1 leverage ratio for certain firms if approved.
"I think it would be good to harmonize the rules," Gensler said.
Peterson later told reporters he hopes the CFTC will address the leverage concerns before it finalizes the rule.
"I don't think it's well thought out," he said. "I think they are trying to fix a problem that doesn't really exist."
-By Sarah N. Lynch,

source
http://www.easybourse.com/bourse/act...roposal-805409
  • #711
  • Mar 3, 2010 3:12pm Mar 3, 2010 3:12pm
"So far the proposal has met with fierce resistance, both by forex dealers and individual traders who are concerned about the leverage ratio. "

"But the leverage piece of the proposal is inconsistent with current rules in place by the self-regulatory National Futures Association..."

""I don't get what we are trying to accomplish here by lowering this to 10 to 1," said House Agriculture Chairman Collin Peterson (D., Minn), saying the proposal appears to put investors' money even more at risk. "Who are you trying to protect here?" "

I like this.
  • #712
  • Mar 3, 2010 5:10pm Mar 3, 2010 5:10pm
Well thank you so much CFTC and Gensler...you have managed to phuck the consumer once again with your stupidy or deliberate acts....b/c of your stupid rules there are less and less retail brokers in the US, less competition is bad...and the few that remain, now feel that they are needed b/c they can provide foreign office...so now they are using the less competitive environment to screw the customers...FXCM increasing spread on micro accounts by 1 pip accross the board.

""Important Date
21 March: To prepare for the upgrade, Micro account spreads will change to Standard account spreads.

I guess you can't change the spots on a leopard...they will use the NFA and CFTC rules that were supposed to protect you to their advantage and to your disadvantage...thanks again Mr. Gensler for screwing up the law of supply and demand.
  • #713
  • Mar 3, 2010 5:16pm Mar 3, 2010 5:16pm
Quoting wwwin
Well thank you so much CFTC and Gensler...you have managed to phuck the consumer once again with your stupidy or deliberate acts....b/c of your stupid rules there are less and less retail brokers in the US, less competition is bad...and the few that remain, now feel that they are needed b/c they can provide foreign office...so now they are using the less competitive environment to screw the customers...FXCM increasing spread on micro accounts by 1 pip accross the board.

""Important Date
[b]21 March: To prepare for the upgrade, Micro...
Hi wwwin,

Micro spreads are going to match standard account spreads because FXCM Micro is preparing to use No Dealing Desk execution for all micro transactions. This decision was made independent of the CFTC proposal.

Nice article pointed out by Goodboy. The number of comments received by the CFTC is definitely focusing their attention, and 5,600+ comments is unprecedented. This years CFTC proposal regarding energy speculation limits only received 22 comments and it was given much more attention by the media. Last year the CFTC published some 17 rule proposals in the federal register, and the number of comment letters for all those proposals combined was only 220. Compare this to 5,600+ for the forex proposal.

-Jason
  • #714
  • Mar 3, 2010 5:38pm Mar 3, 2010 5:38pm
Quoting Jason Rogers
Hi wwwin,

Micro spreads are going to match standard account spreads because FXCM Micro is preparing to use No Dealing Desk execution for all micro transactions....
Thx Jason for interesting facts.

Do expect me to join FXCM UK if 10:1 leverage is approved. I hope there r no raises on the Mini accounts.

Btw, Jason a question about FXCM, do you guys charge/give interest per second to your customers, for holding a position on "per seconds/hours basis" I recently came to learn my profits were disappearing from P/L statement and was told its due to policy of broker charging traders interest on hold position. This came as a shock because, i thought only charge was if we held position overnight.

Regards
GB.
  • #715
  • Mar 3, 2010 6:59pm Mar 3, 2010 6:59pm
I really hope this doesnt happen. I just sent an email to the secretery via forex.com to complain.

Here is the link:

[email protected]

Sorry if this was posted perviously, but i just recieved the email and figured to forward here.
  • #716
  • Mar 3, 2010 7:25pm Mar 3, 2010 7:25pm
The idea of the leverage change after last years stop, limit and hedging changes are too much. This will be catastrophic to the small trader who has everybody on his back to begin with.

The changes in the "rules" have caused most of my associates to open accounts overseas. Unfortunatly with the latest proposals I am very seriously looking into making the move myself.

Seatbelts, Machinery Guards etc. were a good ideas, inconvienient, but good. However there are some things that the Government can't protect a beginner or a fool from "Themselves".
  • #717
  • Mar 3, 2010 7:28pm Mar 3, 2010 7:28pm
Quoting wwwin
..so now they are using the less competitive environment to screw the customers...FXCM increasing spread on micro accounts by 1 pip accross the board.
hummm.....lets see.... didn't you laugh at me few weeks ago when I warned people about spread rise?
  • #718
  • Mar 3, 2010 7:32pm Mar 3, 2010 7:32pm
Quoting Platypus
hummm.....lets see.... didn't you laugh at me few weeks ago when I warned people about spread rise?
yes, master you were correct....this is only the beginning, that is why the coalition was formed to decide that they would all raise spreads LOL...if we all screw them they have no place to go...that's what they discussed at their meeting with the CFTC...and the spread rise is related to the what is going on with the margin....I don't buy for a minute that one is not related to the other.
  • #719
  • Mar 4, 2010 1:23am Mar 4, 2010 1:23am
Quoting GoodBoy
Gensler told lawmakers the intent of rule is to "protect the public" and the agency is still reviewing the more than 5,600 comments it has received. Most of those comments, he said, pertain to the leverage issue.
Peterson later told reporters he hopes the CFTC will address the leverage concerns before it finalizes the rule.
"I don't think it's well thought out," he said. "I think they are trying to fix a problem that doesn't really exist."
This is very encouraging news.

It's just so very sweet of Gary to be embracing such altruism only in the very best interests of protecting all the little people while he and all his institution mates escape accountability altogether.

And here we were, in our collective naivety, thinking Gary was just trying to shaft us all so he could give a free kick to the NFA, feather his own nest, extend his personal power base internationally, blood-let the little people for appeasement, all the while making sure the big end of town got off scott-free.

We're touched Gary, really. Your concern for us brings a tear to the eye.

Now, if you wouldn't mind, and if you're all done patting us all on the head like children... how about sharing the power around.... consumers would like to have a seat at the industry table. An industry funded Forex Retail Traders Consumer Advice Bureau and Resource Centre, please.

Consumers are quite capable of taking care of themselves thank you very much (in fact, we would do a much better job of it than anyone else because we live the experience, unlike those pontificating through voyeurism alone).

If someone in office would make an effort to locate a spare seat so we all can join the table as equal players. we'd be much obliged.
  • #720
  • Mar 4, 2010 2:17am Mar 4, 2010 2:17am
While the article is comforting, it doesn't sound like it detailed anything after the first five minutes of the meeting. Is there a full text available anywhere? I haven't found one so far.
Hindsight is 20/20
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