Click Here To Read The Article "CFTC's Proposed Leverage Changes For Forex"

As the deadline for public comments nears, traders everywhere must pay close attentionThe recently proposed margin changes by the U.S. Commodity Futures Trading Commission (CFTC) could increase the minimum margin requirement to 10 percent (10-to-1 leverage), which could destroy the U.S. retail foreign exchange industry. If you were trading a major currency pair, this is how the CFTC's proposed regulatory restrictions would affect your margin requirement:

Maximum Leverage under
Current Regulations

Maximum Leverage under
Proposed Changes

USD/JPY

USD/JPY

1 lot (100,000)

1 lot (100,000)

100:1 leverage (one percent)

10:1 leverage (10 percent)

Margin requirement: $1,000

Margin requirement: $10,000

Based on the above example, positions will require much more capital, and eliminate a large number of potential and existing market participants.

What should traders do about this?

As the March 22, 2010 deadline for public comments nears, the CFTC needs to know that the proposed leverage regulation would be devastating to forex traders in the U.S. You can voice your comments directly to the CFTC at [email protected].

Please include 'Regulation of Retail Forex' in the subject line of your message and the ID number RIN 3038-AC61 in the body of the message. You can also submit your comments by any of the following methods (include above ID number):


  • Fax: (202) 418-5521
  • Mail: David Stawick, Secretary
    Commodity Futures Trading Commission
    1155 21st Street, N.W.,
    Washington, DC 20581
  • Courier: Use the same as mail above.

GFT and the industry think that it's important that as a forex trading customer, all traders must make their feelings known to the CFTC that this 10:1 leverage rule must not stand, or the ability to trade forex on a leveraged basis will end.

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