Good day people, guess most of active traders under US based brokers have already heard this news some time back. Our current broker, FXDD is in the process of registering with the CFTC and joining the NFA, and they are in full compliance with all applicable NFA and CFTC regulations. And Sunday November 29th, 2009 is the implementation date for the above. Cut the long story short, here are the changes:
1. Major currencies leverage will be set at 100:1; all others will have leverage of 25:1. Affected currencies for 25:1 will be the USD/TRY and the USD/MXN. Gold and silver leverage will be set at 100:1.
2. Official FXDD account statements will show position offset on a FIFO (First in, First out) basis.
3. FXDD does not recognize hedging. Oppositing orders are offset immediately. Meaning you can no longer buy and sell the same currency pair at the same time on the same primary account.
4. No more daily MetaTrader statement via email. Official daily and monthly statements will be emailed directoy from back office.
And we're suppose to download the latest compliant version of Meta Trader before the implementation date. Oh dear, if you are under a US based broker, i'm sure majority of them are being regulated. Thats what happen whenever economic bubble burst happens, everything are being regulated again... causes restriction on innovation of financial instruments.. though regulation are for the benefit of preventing another recession..
Sadly, for FXDD users, we're given such a short notice period for changes. Meaning by the time market open next week, all ur positions have to be re-calculated based on the new leverage requirements. basically, we have only 2 1/2 days to get these done. what happens if u don't? if by the time market open next Monday and u're in a position too highly leveraged, u gonna get a MARGIN CALL! << note that this word SUCKS!
Well, anyway, small players like me ain't much affected, maybe yet. but pity those bigger players. maybe this isnt happening in foreign brokers areas like London, or Switzerland. Im sure one way or another, (switching broker or altering our money management with the new leverageetc) we all will get this thru' yea.