Comments on: CFTC Proposes Unpopular Regulations on Retail FOREX Transactions

By: Francesc’s Weblog » CFTC Forex Proposal; US Retail Market to Disappear?

Tue, 19 Jan 2010 09:27:52 +0000

[...] also: CFTC Proposes Unpopular Regulations on Retail FOREX Transactions by Ryan O’Keefe Sequential attack on Fx traders by enforcing more and more tightening regulations by Dr. Sivaraman [...]

By: Mike Andrews

Mike Andrews — Sun, 17 Jan 2010 03:51:03 +0000

Thank you, Ryan, for clearly stating the issues. And for actually reading the entire proposed regulation. Trying to read it my eyes severely crossed and my head hit the keyboard, leaving small square key-prints on my forehead and nose-tip.

Rather than finding and prosecuting illegal and immoral people in the 4X trade, the CFTC instead goes after the very people who are abused – the retail traders. That’s like taking people off the streets because they might be hurt by bad people, while leaving the bad people to freely roam the streets. Who then is free, and whom would the CFTC be holding captive?

Also, telling ill-informed, inexperienced people they will be protected by this ruling will only lead many of them into a new false sense of security. Thereby leaving them open to other illegal and despicable schemes. In the end the CFTC only harms the people it purports to serve while utterly failing its vital mission of finding and prosecuting criminals.

This is a horribly misguided and clearly destructive regulation.

To the CFTC and NFA – “Do your job – prosecute the criminals, not the traders.”

By: Robb Ross - CTA

Robb Ross - CTA — Sat, 16 Jan 2010 23:06:41 +0000

Ryan,

As usual you’ve written another great, concise, and informative article. Being a Registered CTA I do agree with your points. Just the name of the CFTC, Commodity Futures Trading Commission, explains the 10:1 margin rule. They see things from a Commodity Futures prospective. For example, the SP500 eMini Futures are currently valued at $56,512.50. Not Coincidently the margin for overnight trades is $5,625. So it’s basically 10:1. Now daytrading requires less margin, depending on the firm it’s around $800.

So if the FCM and IB are fully capitalized, that protects the market when the “investors” lose. And a very high percentage of them (maybe 90%) lose their money.

Also be sure to contact your Congressperson, your two U.S. Senators (1.5 if your in Massachusetts), and the heads of the relevant committees. Just tell them that once again their exporting jobs and capital overseas!

If the CFTC passes this rule, then I’ll tell you the next draconian step they’ll take to try to clean up their mess. They’ll pass laws whereby you can’t trade overseas. They do that now with gambling. They’ll instruct banks not to honor transfers to overseas forex merchants. It will create a black market, lost jobs, lost revenue, and the trader once again is the bad guy.