• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

TraderGav.com

Gav's trading blog - Perseverance, Consistency, Confidence

  • Home
  • Start Here
    • Back to Basics of Trading
    • Resource For Traders – The Best Tools for Traders
    • Learn Trading Articles
    • Sierra Chart Resource
  • Blog
    • Blog Posts
    • Other learning resource
    • Dummy Collection
    • Harmonic setups
  • About Me

NFA new margin requirements

by Gav Leave a Comment

This is not a breaking news, just a reminder to my readers since THE change is coming in around a month time. Official date given by NFA is 30th November 2009. CFTC approved NFA amendments to Section 12 of NFA rule book, which requires FDMs to collect a margin deposit of 1% of the notional value of the position held in the USD, GBP, CHF, CAD, JPY, EUR , AUD, NZD, Swedish krona, Norwegion krone and Danish krone, and 4% of the notional value of other positions.

This simply means that, more margin is required to open or hold a FX position. In short, for the major pairs mentioned above, maxim leverage of 1:100 is allowed, and 1:25 for the other pairs. Though at the first glance, this seems to be protective for novice traders who naturally loves the high leverage game  before getting burnt. I guess the most impacted group is the experienced professional traders who know how to handle their trades and prefer high leverage which allows them to achieve more profits with less capital. This will surely affect the way of conducting the trading business.

I haven’t made a thorough research on brokers’ reactions. I had a quick look at FXCM, Oanda, MB trading and Interactive Brokers. So far, FXCM is one the first to comply the new margin requirements starting 22-Nov-2009. Oanda has already met the margin requirements set up by NFA.  And I don’t see any big change for big firm like Interactive Brokers where leverage level for sport FX trading is always low. No update on MBT website so far.

Check your U.S based broker for details.

Filed Under: news, Trading Journal Tagged With: Broker, CFTC, FX, margin requirement, NFA

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Best Tools For Traders

My Name is Gav.
I am a Father, Husband, Trader, And Blogger. A serious coffee addict. I started training since 2005, mainly on FX and Futures.

About Me

Footer

Recommend FX Charting

Recommended Training

FXSAnalytics

Copyright © 2023 · Affiliate Disclosure · Privacy