Indiana Grain Company, LLC

Posted: 03/07/10

By: tomgrisafi

The CFTC (Commodities Futures Trading Commission) is apparently intent on reining in the amount of leverage available to those who trade in the FOREX markets and, according to one story in today's Wall Street Journal, someone in Michigan is none-too-pleased.

An attempt by regulators to protect investors from volatile global currency markets has triggered an uproar among lawmakers, currency dealers and thousands of small traders.

The Commodity Futures Trading Commission has proposed rules that would reduce the amount of borrowed funds that retail investors can use when investing in the U.S. foreign-exchange market to as much as 10-to-1, from the existing 100-to-1 for major currencies.

Todd Lambrix, a currency day trader in Flint, Mich., is one of the many small investors opposing the CFTC plan. Mr. Lambrix has $5,000 in his currency account and often uses 100-to-1 leverage to trade currencies. Three years into trading foreign exchange, he said, he has learned how to control risk by setting enough technical limits that automatically close out trades. Last year, he broke even. "What right do you have to tell me that I can't spend my money on things I choose?" he said.

Source: Wall Street Journal, iStock Analyst

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