BAN on Hedging for NFA Brokers!

liggy002 · #1 04-18-2009, 08:38 PM

I just heard that the NFA has passed the following ruling that will go into effect on May 15th, 2009: Hedging will not be allowed for brokers registered with the NFA.

I am not totally sure of the truth of this statement but if it is true, be aware if you are using a hedging strategy on a US based broker with NFA regulation. This further adds to my suspicion that the US government may be pulling the strings behind the scenes with these regulations.

moneydream · #2 04-19-2009, 12:12 AM

Quote:

Originally Posted by liggy002

I just heard that the NFA has passed the following ruling that will go into effect on May 15th, 2009: Hedging will not be allowed for brokers registered with the NFA.

I am not totally sure of the truth of this statement but if it is true, be aware if you are using a hedging strategy on a US based broker with NFA regulation. This further adds to my suspicion that the US government may be pulling the strings behind the scenes with these regulations.

I have the same feeling too that USA government is behind this. Just received email from several USA brokers about this implementation. Just curious that will the whole world also follow the same rule after this?

liggy002 · #3 04-19-2009, 12:58 AM

Hopefully not money,

otherwise the Hedging EA i'm looking to try out will be worthless.

limitup · #4 04-19-2009, 02:03 PM

Quote:

Originally Posted by moneydream

I have the same feeling too that USA government is behind this. Just received email from several USA brokers about this implementation. Just curious that will the whole world also follow the same rule after this?

Well, actually they cannot do this. The only body that can (and that is a maybe) is the CFTC. The NFA does not have the legal power to produce this rule. If this rule became a law, then the CFTC would have to declare spot currency trading a form of a forward contract...it is not at the present...but then again, the U.S. constitution was never legal as well.

Maybe I need to go to the NFA building with my three corner hat and flintlock an see waz up.

Sooner · #5 05-07-2009, 11:55 AM

IBFX has indicated they will be making this change on the 15th. This in and of itself pretty much limits all EA's to a single trade as if you are already long, going short at any point while the long is open will result in the long position being closed automatically. I have several EA's that I run with extremely small lots and 2-3 orders at a time, often times they end up being hedged to some degree, but this will pretty much kill those.

^eagle^ · #6 05-07-2009, 02:39 PM

FXDD who is NFA pending sent an email stating to continue to trade normally. They are looking for a way around the issue. I have Good ole FAP on demo right now which relies heavily on hedging. I will update you on what happens after the 15th.