Is this for real this 10:1 leverage rule , I can't imagine it will pass as this would kill the US industry , there will be massive migration to the likes of Saxo, and other European dealers. IB interface and accounting suck .
ok the interface we could debate about, but what issue do you have with their accounting. I like it, I like they are rather conservative in their margin calculations. I also think their portfolio margining makes a lot of sense. Otherwise, reports can be customtailored more than anyplace else. What else is missing?
I am referring to interactive brokers. They replicate AUDCAD, for example, as a synthetic at 25x. Under the 10x rule the result will be 5x for AUDCAD, among others.
got it ;-) worked in exotics long time ago, the term still reminds me of entirely different products. I have a hard time to imagine things happen as you mentioned. Lets say you buy 100k AUDCAD, you pay CAD 88k (rounded), converted into USD would make you pay around USD 83k. 10x requires you to put up around 8.3k USD. I dont think regulators will apply the rule directly to the BD but rather to the beneficial owner. Please correct if you disagree or have evidence to the contrary.
I suppose it will be up to IB whether to pass the requirement (5x) to the client. Certainly they would not need to enforce 5x on odd-pairs, but as a function of how they replicate. Maybe they'll simply offer all pairs at 10x, even those they manufacture through the synthetic.
i would almost be certain they will require an equal rate to all pairs. Anything else would certainly turn out to be a complete mess in retail space. I cannot even believe they debate this at this point in time, are there not 200 other issues to more urgently take care of?
The CME lobby. 6E trades at 30x initial. I see no reason to regulate OTC leverage, other than a tacit admission by the puppet US regulators that all FX should be cleared on the CME. An obvious double-standard to clear OTC at 10x and a fungible exchange offering at 30x.
well, I actually welcome that. Why? For years retail OTC fx brokers have failed to introduce fx options (there are a few but spreads are ridiculous). A huge pickup in exchange traded fx futures will certainly also push volume in listed fx options as well, possibly also open up cross pair fx options. However, I agree with you, if regulators wanted to regulate the otc market they have much better ways to achieve this. Increasing margin requirements on otc fx to 3x the amount required for listed futures smells a lot like lobby-ism.
DBFX is just as bad as FXCM. I lost a LOT of my and my clients' money with a little game they play with money manager funds... Complete garbage, masquerading under a big name. This is NOT the same group as the ones that provide liquidity in the markets. The FX retail dept. is a different division. Basically, Refco infrastructure and white-labeled from FXCM... Got so frustrated with all the foolishness with FX "brokers", we execute our own stuff direct. No desk no problems...