Funnily enough I don't disagree with much about what you wrote! If I can clarify the 'madness' comments. The reason I wrote that was the guy seemed to imply people only used spot because they could not afford futures in terms of margin. Of course that might be true for some but this amount of business would be a tiny percentage of the spot fx daily volume. Therefore there must be very good reasons why the spot daily volume is vast and so much bigger than that carried out via futures. I would also point out that segregated funds is not necessarily as good as it sounds. Yes your funds are seperated from that of the firm but if there are some large clients can not make their margin call then the broker can use your margin instead. And so your safety of funds is still dependent upon the firms risk management procedures and ability to fund losses etc.