• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 8. Inside a Forex Platform > Protecting Yourself

Protecting Yourself

Since the introduction of the Commodity Futures Modernization Act (CFMA) in 2000, the CFTC has the jurisdiction and authority to investigate firms offering or selling foreign exchange futures, options, and even spot products. The CFTC has made great strides in cleaning up this market. It has issued advisory warnings—especially concerning sales solicitations that appear in newspapers, radio, television promotions, or on websites and that promise high-return, low-risk investment opportunities in Forex. Even though Forex is a new market to most investors, that is not an excuse to suspend common sense. In this book, or anywhere else, there are no golden trading secrets. Even if there were, people would not reveal such secrets for $100 per month. The CFTC and NFA urge the public to be skeptical of such claims. They offer some signs to look for and preventive measures that investors can take as they enter the Forex market.

Avoiding Fraud

Generally speaking, foreign currency futures and options contracts may be traded legally on an exchange or board of trade that has been approved by the CFTC. Even where currency trading does not occur on a commission-approved exchange or board of trade, it can be conducted legally. In such a case, generally speaking, one or both parties to the trade must be (or must be a regulated affiliate of) a bank, insurance company, registered securities broker-dealer, futures commission merchant or other financial institution, or an individual or entity with a high net worth.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint