Dave Wallace, one of our State Coordinators who does a LOT of trading on various systems and comodities, received a notification from another of his FOREX accounts informing him that he must close my positions in XAU or XAG by July 15th. Our law makers have blocked US Citizens from leveraged trading of precious metals.
Here are Dave's thoughts on the matter:
I find it amazing that while living in “The home of the free” we continue to lose investment rights that other citizens of the world still enjoy. I fully intend to bring this issue to my representatives in the hope that this will be corrected. It is truly a sad day when being an American Citizen blocks you from investment opportunities that others around the world enjoy.
And here is the letter which Dave recieved from his Trading Company.
As a result of the recently enacted Dodd–Frank Wall Street Reform and Consumer Protection Act, U.S.-based retail forex dealers such as OANDA are prohibited from offering leveraged trading in precious metals to retail clients after Friday, July 15, 2011.
As a client based in the U.S., you will not be able to trade our four precious metal pairs (XAU/USD, XAG/USD, XAU/JPY, XAG/JPY) on a leveraged basis, effective end of day July 15. Leveraged trading in other currency pairs will remain unaffected, with the same margin requirements.
You will still be able to trade precious metals, but only on a 1:1 non-leveraged basis (requiring substantially more margin). If you do not have sufficient margin to cover your open metal positions in full, you need to reduce your exposure to gold and silver pairs before end of day July 15, or risk a margin call of all your open positions when this change is implemented.
We sincerely regret any inconvenience caused by this change in legal requirements. If you have any questions, please do not hesitate to contact our Customer Service Team at firstname.lastname@example.org.
We appreciate your business with OANDA.
- The OANDA fxTrade Team
Why is this change required?
Effective the end of Friday, July 15, 2011, Retail Foreign Exchange Dealers (RFEDs) registered with the Commodity Futures Trading Commission (CFTC) will be prohibited from offering leveraged retail trading in commodities, including precious metals such as gold and silver. This change in the U.S. law is being enforced by the CFTC as an outcome of The Dodd–Frank Wall Street Reform and Consumer Protection Act.
So the Dodd-Frank Wall Street Reform and Consumer Protection Act is "protecting" consumers from trading how they whant with whom they when the with whatever resources they may have available to them. This "You must be protected from yourself" additude is exactly the kind of Statist Mentality we in the NJ-C4L are fighting to stop.
-Daniel A. Krause