Important Changes to Gold and Silver Trading

If you trade precious metals, take action now to avoid margin calls

As a result of the recently enacted Dodd–Frank Wall Street Reform and Consumer Protection Act, OANDA (U.S.) Corporation is prohibited from offering leveraged trading in precious metals to retail clients after Friday, July 15, 2011.

What does this change mean to your trading?

After July 15, you will still be able to trade precious metal pairs (XAU/USD, XAG/USD, XAU/JPY, XAG/JPY), but only on a 1:1 non-leveraged basis (requiring substantially more margin). If you do not have sufficient margin to cover your open metal positions in full at all times, you will receive a margin closeout (“margin call”).

If you have open positions in gold or silver pairs, you must close these precious metals positions before end of day on July 15 or risk a margin closeout if they do not meet the new margin requirements.

Leveraged trading in other currency pairs will remain unaffected, with the same margin requirements.

WHY IS THIS CHANGE REQUIRED?

Effective the end of Friday, July 15, 2011, Retail Foreign Exchange Dealers (RFEDs) registered with the Commodity Futures Trading Commission (CFTC) will be prohibited from offering leveraged retail trading in commodities, including precious metals such as gold and silver. This change in the U.S. law is being enforced by the CFTC as an outcome of The Dodd–Frank Wall Street Reform and Consumer Protection Act.