Proposed NFA Capital Requirement - page 58
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NFA Hedging rule vs Hedging - Dumb & Dumber
Yes, this new rule is dumb, particularly because it accomplished nothing except to roil the market. Hard to believe the misinformation and blatant speculation that surrounds it. Not overly impressed with the folks at NFA.
Unfortunately, so-called "hedging" is even dumber than the rule. It's a misnomer. This is not hedging as a "hedge fund" would do it. It should be called a "Freeze." That's what you're doing when you open an off-setting position. You've frozen your original position and are now OUT OF THE MARKET. Whether you're down 50 or up fifty, makes no difference. You cannot salvage a losing position via this so-called hedge. One side going up, the other down.
Eventually you will have to eat it.
The biggest problem however, is "opportunity cost." While you're frozen, the market moves
400 pts, either way, while you're fat, DUMB, and happy. You're marvelous "hedge" doesn't look so hot now.
For SWISS brokers, how do you find out if they have a license?
Yes, this new rule is dumb, particularly because it accomplished nothing except to roil the market. Hard to believe the misinformation and blatant speculation that surrounds it. Not overly impressed with the folks at NFA.
Unfortunately, so-called "hedging" is even dumber than the rule. It's a misnomer. This is not hedging as a "hedge fund" would do it. It should be called a "Freeze." That's what you're doing when you open an off-setting position. You've frozen your original position and are now OUT OF THE MARKET. Whether you're down 50 or up fifty, makes no difference. You cannot salvage a losing position via this so-called hedge. One side going up, the other down.
Eventually you will have to eat it.
The biggest problem however, is "opportunity cost." While you're frozen, the market moves
400 pts, either way, while you're fat, DUMB, and happy. You're marvelous "hedge" doesn't look so hot now.I don't hedge this way and agree there's no real benefit. However, I do trade multiple systems on the same pairs, sometimes taking simultaneous long/short positions. As usual, the law of unintended (or is it?) consequences comes to play with the bureaucrats and their regs and rules.
Now they're taking away one of FX's big advantages: the ability to diversify trading strategies (e.g., trade a long-term trend-following system on the EURUSD while also running a short-term scalping EA on it).
For SWISS brokers, how do you find out if they have a license?
check here:
SFBC - Swiss Federal Banking Commission
April Net Capital Report
The CFTC has just released their latest net capital figures. These appear to be the finalists who have survived the net capital guillotine:
Financial Data for FCMs
The following firms have net capital below $20 million
Easy Forex $15,549,000
Ikkon Royal $16,355,000
MB Trading $17,100,000
Advanced Markets $19,796,000
The following firms have net capital above $20 million
Alpari $20,975,000
Forex Club $21,795,000
CMS Forex $29,649,000
Interbank FX $36,507,000
PFG $36,843,000
FX Solutions $41,546,000
FXCM $60,472,000
GFT Forex $80,693,000
Gain Capital $90,801,000
Oanda $159,739,000
In your earlier post you said FXCM $113,463,000 and now
FXCM $60,472,000??? why?
Anyone?