The potential end of Retail FX?.....

[G&C]

FINRA (Financial Industry Regulatory Authority) in the US are proposing a motion to increase the leverage terms on Retail FX accounts to two thirds of the notional value of the contract i.e. a position of $750,000 would incur a margin depo of $500,000!

FINRA - Regulatory Notice 09-06

Tin hats on people in preperation of the fall out from this one....

 

[wasp]

That better be just for the US!

 

[Rhody Trader]

Can't see that sort of restriction coming off. It's less than the permissible leverage for regular stock trading (2:1) and stocks move much more than currency pairs do, on average. Besides, the brokers will never allow it to happen. It would kill their business.

 

[Rhody Trader]

Just did a bit of looking at the FINRA membership list. Didn't see the likes of FXCM on it. That tells me FINRA approving this proposal probably wouldn't directly impact the brokers.

 

[webart]

If that was the case, many more would move to FX futures, which would mean more liquidity, which is all FX futures needs. Futures are cheaper, most of the time have less or no spread, have no restrictions on scalping, show volume, show market depth, time and sales, allow stop limit orders and are regulated. The only problem with futures is the large contract size (too large for some people) and liquidity on contracts other than 6E (Euro).

 

[forexpipz]

No brainer

If that was the case, many more would move to FX futures, which would mean more liquidity, which is all FX futures needs. Futures are cheaper, most of the time have less or no spread, have no restrictions on scalping, show volume, show market depth, time and sales, allow stop limit orders and are regulated. The only problem with futures is contract size (for some) and liquidity on contracts other than ES (Euro).

Retail forex market has grown at over 18% for the last 6 years or more. You can see where that idea is going. Straight to the bottom of the pile. Next they will try to regulate the internet. Idiots...:clap:

 

[jeffsmith]

Hi webart,
You are right that liquidity we can find in future market and all the brokers try to involve their clients in future trading so that they cam make good volume and brokerage. If there was no restriction of contract size, brokers could make nice brokerage and could see traders in profit too.

 

[MereChase]

To all interested parties in the US, let's bombard them with comments!

Fact of the matter is anything can squeak by and become regulation in this day and time, as crazy as it seems. Something good comes along, and next thing you know the opportunity is shut down due to govt regulation. Let's nip this one in the bud, and make a statement so it's not re-visitied again!

The only way to do this is by communicating. I've been working on mine all day, will send out tomorrow.

The fact that this even is being imposed is pretty scary to me. Think about it.

If this is something that you wouldn't want imposed, you owe it yo yourself as a trader to speak out . Nothing to lose by doing so.

 

[forexpipz]

Understood

To all interested parties in the US, let's bombard them with comments!

Fact of the matter is anything can squeak by and become regulation in this day and time, as crazy as it seems. Something good comes along, and next thing you know the opportunity is shut down due to govt regulation. Let's nip this one in the bud, and make a statement so it's not re-visitied again!

The only way to do this is by communicating. I've been working on mine all day, will send out tomorrow.

The fact that this even is being imposed is pretty scary to me. Think about it.

If this is something that you wouldn't want imposed, you owe it yo yourself as a trader to speak out . Nothing to lose by doing so.

Yeah I know what you are saying. But the simple fact of the matter is. You cannot just decide you are going to regulate such a multinational headed beast that is bigger and stronger than all the central banks and governments. It just aint going to work. Just like internet piracy clamp downs are not going to work. I can swear if I want and insult other leaders. The zealots can try but put regulation on freedom of speech will not happen. You can have an Iranian guy shout from the tops of his digital palace "I'm a raging homo come and stone me to death" but where is he.

We'll all be talking the same language next. Actually that wouldn't be so bad I dont think. Out with the old in with the new.

I'm going to start my gold bunker shortly just in case though.