FOREX Futures and Dodd-Frank

The primary exchange for FOREX futures is the International Monetary Market division of the CME Group ( ICE FX (, formerly the New York Board of Trade, makes a market in currency futures. In 2010, I wrote:

Turnabout is fair play. Some retail spot FOREX brokers now offer trading in silver (XAGUSD) and gold (XAUUSD).
Tip: Gold and silver traders with a bent for high risk may find higher leverage available with an overseas retail spot FOREX broker.
Alas, no more! In July of 2011, the government, in its good judgment, stopped U.S. citizens from trading gold and silver on the spot market as part of the implementation of the Dodd-Frank omnibus legislation. It appears the futures exchanges complained voraciously about losing business because of the more attractive margins and leverage in the spot market. In futures, precious metal leverage is 10:1 to 15:1 as opposed to the 100:1 and 50:1 spot metal traders could use. Competition, we learn, is good for the other guy but not for us.
By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2020. Content published with author's permission.

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