Forex Trader's Bill of Rights

Excerpt from upcoming September Futures cover Q&A with Michael Stumm

FM: 8) The right to learn on your own?

MS: This has to do with transparency. We have a forum that is totally uncensored. If you go to our forum you will see every complaint that our customers ever have had. In some ways it is a gutsy move but we have found out that it has been beneficial.

FM: 9) The right to pay and receive interest?

MS: You would be surprised [at] how many brokers have you put in margin capital and it is sitting in an account and you don’t get interest for it. Why not? That money is effectively sitting in some bank and that broker is getting interest for it. It is ok, but make it transparent. Let the broker say, ‘We are making money from your deposit but we are not giving it to you.’ If you want to be fair about it then provide interest.

If somebody has a position open for five minutes and it happens to cross over the end of day period they’re effectively subsidizing all the day traders who traded intraday without crossing that time boundary; most of the trades are intraday and closed before end of day and it is not right.

The continuous interest is an interesting example. If you have a legacy system and want to introduce continuous interest it is very difficult. You have to go in and do surgery on all parts of your system, but if you are building a system from scratch it costs you nothing. It is very easy. That is one of the nice things [about] starting with a clean sheet of paper, you can just do it right.

FM: Is the Bill of Rights something unique to forex or is it something that could be applied across the board to exchanges and brokers?

MS: I think [it is universal]. It goes back to our engineering roots. The management is engineering and most of the employees are engineers. [They] are weird people, but one of their traits is they have high ethical standards and they just want to do it right. The Forex Trader’s Bill of Rights is something we firmly believe in; we want to do the right thing. From a business point of view, if you don’t do the right thing, you are not going to be as disruptive and you are not going to have a very good long-term outlook and we do think it applies to the wider industry in a much wider way.

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