Genuine speculation stops prices going to extremes as traders decide the move is over done and pile in on the opposite side. When there was no exchange commodities were subject to much greater price swings. The problems happen when someone tries to corner a market or in the case of oil when it looks suspicious because huge deals are done anonymously offshore trading on the Brent exchange. Traders shouldn't give traders a bad name When a market crashes and the public are scared senseless it's traders that step up to the plate and risk their cash to create the dawn of optimism.
Out of the goodness of their hearts and a feeling of moral obligation to look after the welfare of mankind? Nah, to fade the market and try to pick a bottom so they can make money! It's probably not even their own money anyway, they get commission on the gains with none of the risk, they can afford to take chances. Traders are fickle and money hungry, it's the nature of the beast. They'll drive price to wherever the most profit is, regardless of anything and anyone else. They couldn't care less if economies around the world collapse or that they helped cause it, just as long as they made truck loads of money then everything in their world is fine. Define "Genuine speculation" though, is there such a thing as 'fake speculation'?
NFA is not proposing a 1.5:1 cap, it is FINRA. 2 different animals. Get your facts straight before you post, moron.
True, but the NFA is working towards 50x and eventually 25x, correct? FINRA doesn't want stockbrokers dealing in OTC FX.
Genuine meaning transparent as opposed to government agencies, sovereign funds, the Fed, central banks etc. trading through anonymous offshore funds and manipulating prices.
Most recent info I could find on NFA site concerning forex leverage proposals. It appears the NFA wants to eliminate the sub 100:1 bucket shops. Arguments have been made to keep 100:1 as a competitive leverage level for spot fx (over the counter) transactions in relatin to futures. Talk of 25:1 is just wishfull thinking. And yes, FINRA does not want thir licensed brokers engaged in an unregulated market. http://www.nfa.futures.org/news/.\PDF\CFTC\FRSec12_IntNotc021909.pdf http://www.nfa.futures.org/news/newsletter2.html#ForexSecurityDeposits
That's why I have you chasing me around like a little dog That's your job to fix my mistakes Master-Slave Good Job Boi !
to topic: also a look thru the FSA site in the UK and the Dept of Finance site for Canada; I could not find any proposed amendments for limiting the amt of leverage for over the counter fx transactions which makes it highly improbable that the NFA would be as draconian as some have suggested. If instituted, it would drive business away from the the USA (and by default the NFA umbrella) to other areas such as Toronto, London or even Cypress. (Maybe cabletrader knows something about the Bristish take on this since that is not readily public knowledge and it is his backyard)