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RFED's do not have seg funds protection either. The issue here is that there is a potential in the PFG Bankruptcy for the bankruptcy judge to parcel out retail forex funds to other creditors (including futures customers) since retail forex customer funds do not have seg funds protection and futures customers do. It's a question of what place in line are retail forex customers in as the bankruptcy proceedings move forward? We are about to find out.
It remains to be seen how much money futures traders will be getting back either. But trading currency futures and currency spot forex are different products.
I appreciate your input to the forum .... and I am not trying to give you a hard time ... and I like your website... but help me understand....
1. Whatever amount the futures traders get back... they will still be ahead of the forex traders right?
2. How are trading currency futures and currency spot forex different products?
I've tried a demo account at your site and compared it side by side to the futures chart and they were almost identical. The only difference I could see was that spot forex margins are 5 to 6 times higher than futures margins .
Thanks again for your input to the forum
I'm just a simple man trading a simple plan.
My daddy always said, "Every day above ground is a good day!"
Given the different status that futures and forex accounts are currently given under US law, this could be the case. Futures accounts have secured creditor status, while forex accounts are not. That means that in bankruptcy proceeding, futures account holders will get priority in regards to reimbursements.
Currency futures are traded on an exchange, while spot forex is trade over-the-counter. Since futures are traded on an exchange the contracts have to be standardized which means the minimum trade size is larger and there is less variety in the number of currencies you can trade. Since spot forex is traded over-the-counter, there is more flexibility in the trades sizes that are offered, and also greater variety in the number of currencies you can trade.
Also, you mentioned that you saw higher margins on spot forex. I'm not sure whether you are referring to the used margin you set aside as a deposit to open positions, or if you are referring to the transaction cost you pay to enter a trade ( the spread). If you are referring to the spread, one thing to keep in mind is that we charge no commission on top of the spread. We also recently launched a new lower spread account option.
Jason
If you have questions about our services at FXCM please send me a Private Message.
What I was referring to was .... to trade a full lot of EUR/USA requires a deposit(margin) of $3000 and one pip =$12.50 ... to trade one contract of 6E where one tick = $12.50 requires a deposit of $500 margin
I'm just a simple man trading a simple plan.
My daddy always said, "Every day above ground is a good day!"
Since you are a US resident, the margin requirements on your account must comply with CFTC and NFA regulations. You will find the same minimum margins for EUR/USD with any US regulated broker. Note that we have an FXCM UK entity that offers non-US residents the ability to trade one standard lot of EUR/USD with only $500 margin, but that is because UK regulations are different from in the US. In the past, US residents were able to open trading accounts with FXCM's UK entity in order to take advantage of lower margin requirements in the UK, but the regulations in the US changed over the past couple of years. Now only US regulated brokers can offer forex trading to US residents, and they all must comply with the higher 2% margin requirements as shown on this table.
Jason
If you have questions about our services at FXCM please send me a Private Message.
The lawyers for PFG's Forex/Metals customers have just filed a motion designed to prevent creditors from laying claim to the funds of forex traders. The hearing for this motion is set for Thursday morning.
It is a noble sentiment and one that FXCM wholeheartedly supports. We have been hammering away in Washington on this issue for seven years now. Here’s hoping the judge surprises on Thursday with a ruling supportive of retail forex traders everywhere. But clearly, the status quo cannot be tolerated. You can let the CFTC know by emailing [email protected] and by contacting your local Congressional Representatives and passing along your concerns. In the meantime, we will continue to advocate for Segregation of Funds, Customer Insurance, and Public Disclosure of Financials for all FCM’s and RFED’s.