50:1 Leverage – CFTC Final Rules Release

On August 30, 2010 CFTC has released its Final Rules Regarding Retail Forex Transactions.
(You’ll be also able to read the full Release below).

Concerning the leverage rules, quote:
“Leverage in retail forex customer accounts will be subject to a security deposit requirement to be set by the National Futures Association within limits provided by the Commission”.

According to NFA instead of 10:1 leverage cut in the proposed earlier rules, the new 50:1 leverage will be implemented and become effective October 18th, 2010.

This leverage cut affects all retail clients in US, for whom Forex leverage will be limited to 50:1 on major currencies, and 20:1 on minors.

Also, from October 18th 2010 as the the Dodd-Frank Wall Street Reform and Consumer Protection Act come into force, only United States financial institutions will be permitted to act as counter-parties to off-exchange retail Forex transactions for US residents and citizens.

Following these regulations non-US brokers won’t be able to accept US citizens any more. For traders who are not American citizens, but currently live in US, to open an account they’ll need to provide an ID and address proof from their country of citizenship. As well as all transfers to/from live Forex accounts have to be made from non-US banks.

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I want to trade the forex within my Roth IRA with a broker located in Australia. The broker has already told me they would do it, but I have not yet located a custodian that will allow it. I have been trading this IRA for several years with Equity Trust as my custodian in an account at FXCM, but I want to move it to the Australian broker. I’m thinking that a smaller trust company may be more likely to allow this, but so far I haven’t been able to locate one. Trading with a foreign country broker is not illegal, but the NFA/CFTC has such long tentacles that no forex brokerage that has any USA presence at all will buck their strangle hold on US citizens who want to trade with higher leverage. I’m sick and tired of BIG BROTHER trying to save me from something that I should be able to do if I am willing to take the risk.

just difficult to use 50:1
difficult in calculations maybe, to much brain used. of sure because usually trader use 100:1 or 500:1

maybe need time till trader accept it, but to hard for us to accept it, i think regulator need re-think again because 50:1 leverage:
1. Hard to survive if traders having little money in their account.
2. Less buying power for sure

But we may forget about positif side:
1. Minimizing margin from risk specially when trend again our trade
2. Very good if you are “big dog” because it 50% more secure investment than placing your money on 100:1 leverage.

Last word,
I think 50:1 more set for big money, and of sure only for serious and advanced investor. It may having positif side but also i think it having bad side, it not fair if forex only for guys with big money. And for little trader, they need more more pattience because they can’t gain fast, have less buying power with their little money. I think more good if NFA giving options for traders, like adjustable leverage, of sure with providing more than one leverage to choose, 50:1 and 100:1. Then all will become fair play

Best regard

Regulation only hurts the original profitability model… it does not protect anyone much less the retail investors. US forex business lost a ton of both US and foreign retail customers!

I feel that Dodd-Frank ruling can be helpful at the same time judgemental towards the small trader. I had an overseas forex broker and my account was terminated because of this Dodd-Frank ruling.
Since then, I have found my self another overseas broker that will work with me and I will not be told with who or whom I can invest my money with. I am an adult and as such, deserve to be treated with some respect. Patrick

Good point, thank you!

Will be added.

BrokerGuru: I guess is a good thing to create a new section on the site about brokers offering PAMM accounts. In my opinion, this is a revolution in forex, for the begginers, to follow a manager true a PAMM account.

Often I just hear WAY TOO MUCH about the “importance of brokers being regulated”…..I don’t know why so many people think that those regulators are there for the “little guy”, NO, people have conceded to the government & “regulators” have been given a “right to rule & steal(tax)” so they’ve very little incentive to provide good services but brokers who want to do business for the long-term have every incentive to provide a good service as their profits depend on it & it’s through customers (traders) coming together & sharing their experiences is the best way to eliminate the bad brokers & bad practices, laws of the market, baby!

The government & “regulators” only work for the bigger guys, NOT for the regular people, they’ve no incentive to do well for the regular people but working for the bigger guys gets them truckloads of $$$. Nothing epitomizes this more than the stupid FIFO & 50:1 rulings, which is an attempt to chop off two important weapons of individual traders, leverage & hedging……werent’ they going for 10:1, it’s clearly influenced by the “big guys” who’d be just fine with even lower than 10:1 because they’ve so much moolah that they can’t afford to use very high leverage but to individual traders leverage means A LOT.

Who gives a sh!t about what SEC, CFTC, NFA or whatever BSBS thinks! Commies all of’em! No respect for “freedom to CHOOSE”

4runnerforex and loyalforex are no longer accepting U.S. clients.

Here is a link to sign a petition to repeal the Dobb-Frank Wall Street Reform.


Can’t wait unil the 2012 election to correct our government from overstepping their boundry.

This is bold faced communism but anyone who knows thier history will realize this. Who’s going to atop them anyway?! Just bend over suckers

Yes, that’s true. You can invest money into a managed account, where a manager will trade on your behalf. The profit % will vary depending on the terms in your managed account contract and successful trading done by account manager. To find a list of brokers who offer managed accounts, please use our Broker Search:

where select the following parameters:
Managed accounts – “yes”.

I want to know managed account service. I explain what I need, I heard about forex managed account service means I invest some money ($10000 or above) and they give me 10%-20% monthly profit. I don’t need to make any trade. I only invest money, other thing done by them. I want to know service providers of forex managed account. Pls give good managed account service provider list. Thanks

Sure wish we could be free again.

Thank you!

Hello Broker Guru,

Just found your site.
Keep up the good work.
Will be recommending you.

Where in the constitution does it give these idiots in congress the power to control what we do with our own funds. Oh, I forgot, we are only using their funds since they own all of everything. Does this sound like Communism to anyone else?

you got it all wrong, it’s actually 10 times less
with 50:1 you stand to win or loose 50 times the change in price,
in other words, if you go long at the price of 10 dollars
and the price rise to 11 dollars you have won 1 dollar times 50,
and at the same time your margin is 1 for 50, meaning you only need 1 to buy 50
ex: if you have 1000 dollars in your acount you could trade contracts worth 50000
500:1 is obviously better, for the same 1000 you can buy contracts worth 500 000
and if that go up 1 dollar you won that 500 times,
but ofcource this go both ways, so if it goes down you will loose 500 times
and for the same 1000 you can buy contracts worth 500000 and you only need 1000
for security margin, 50:1 is NOT popular amongst the traders because they stand to win less
and they have less buying power

Where fundamentally is the problem with 50:1 leverage isnt that 10 times the liquidity
of a regular 500:1 ?

so if you are a little one you might not like that
or else one might only need 10 times what he/she regularly trade?

narrowing that to the headeacke of needing more to do the same,
the same profit AND THE SAME LOSS,

Why not?!

No, it’s not.

Is it illegal for a US client to use a foreign broker?


Starting October 18, 2010, the CFTC is requiring all foreign Forex brokers to repatriate U.S. residents back to a CFTC registered/NFA member Forex broker.

Foreign Brokers who do not comply, including offshore Forex brokers, will be in direct violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and subject to strict penalties.

US residents who held accounts with NFA regulated brokers but used other branches: UK, Australia and other, would have their accounts transferred to the US branch, where they’ll be trading with 50:1 leverage.


Arab Financial Brokers
Fin FX
Forex FS – Australia
FXM Trade
InvestTechFX – Canada
MF Financial (mffx.com) – UK
PrimeBank Forex
United World Capital

I am switching to 1pipfix.com as I get keep using 500 leverage

i think the investors have the freedom to choose the leverage they need in his strategy
and of course if the investor is 18 or 21 years above it means he knows what he is doing so what is this … rules ?

Hey guys, here is what I’ve received from IBFX today:

“As of this afternoon, the CFTC has ruled that the provisions in their new ruling preventing US citizens from trading with foreign brokers will not be enforced until July 21, 2011. Because of this extended time frame IBFX Australia will be accepting applications from US Citizens next week”.


In fact, CFTC was looking to do something about it in the nearest future… So far no details have been released.

But US citizens will still be able to open accounts overseas, am I right about this?