Martin Lee @ Sg
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Forex Margin Requirements to Go Up for US Regulated Firms

Effective from Monday 30th November 2009, a new NFA compliance rule will go into effect for all US regulated firms. The new rule dictates a 1% margin requirement for the major currencies, capping the maximum available leverage at 100:1. The new margin requirement for all other currencies will be 4% or 25:1 leverage.

The new NFA regulation is intended to protect retail investors in the US by preventing excessive use of leverage by traders who may not have an adequate understanding of the associated risks. Currently, some firms offer leverage levels as high as 0.5%.

Forex traders who have a forex trading account directly with US-based firms will be affected by the change and will need to monitor their margin levels carefully.

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