FED warns of currency volatility

Discussion in 'Wall St. News' started by marketwizards, Nov 17, 2009.

  1. marketwizards

    marketwizards Guest

    There is already talk about banning no leverage on FOREX market!

    Ban forex futures and and leverage and market volatility would disappear overnight. 99% of the market participants would leave the forex market without 0% leverage.

  2. Not likely.

    Retail volume is minicule in foreign exchange.
  3. Are you kidding?

    Futures market and retail market vs. the interbank market is like comparing a cup of water to the atlantic ocean.

    Interbank market MOVES because of the size going through. Those two markets follow. Interbank trading exists on credit lines negotiated between banks. One could only imagine what the big bank's are between each other. 5 billion? more?
  4. AyeYo


    Of course, it's the shorters' fault that stocks go down. It's the traders' fault that oil goes up. And now it's the retail fx's crowds' fault that currencies are volatile. *eyeroll*
  5. marketwizards

    marketwizards Guest

    The banks won't lend you 99% of money to speculate in real estate or any business, why should banks lend you money to speculate in forex unless the money isn't even real. the leverage is b.s.

  6. Dude, this is about the Fed intervening in the market to support the US$.

    All central banks intervene from time to time and it not about leverage. Don't get your knickers in a twist about this one.
  7. Why WOULDN'T they lend the money to speculate in FOREX?! They make a ton of cash on the spread and have very little risk via margin calls.
  8. Banjo


    There's nothing in that article about leverage, where are you getting this leverage convo from? Are these just some random thoughts of yours?
  9. They are already reducing it. I got this email about 2 weeks ago...

    "Effective Monday, November 30, 2009 a new NFA compliance rule will go into effect for all US regulated firms. The new rule dictates a 1% margin requirement for the major currencies, capping the maximum available leverage at 100:1. The new margin requirement for all other currencies will be 4% or 25:1 leverage. View full list of currency pairs.

    The new NFA regulation is intended to protect retail investors in the US by preventing excessive use of leverage by traders who may not have an adequate understanding of the associated risks. We support their intention and have always provided customers with the ability to employ lower leverage ratios, based on their own personal preference.

    What this means to you

    The margin settings in your account will be changed to require 1% on all major currencies and 4% for all others on Monday, November 23, 2009 at 5:00 PM ET."

    The it basically goes on and says if you want to keep your current leverage that they can transfer your account to the UK branch to get around the rules..
  10. Devin Brady

    Devin Brady ET Sponsor

    #10     Nov 17, 2009