An Update on the Debate over Commodity Futures Position Limits
5 Pages Posted: 8 Aug 2015
Date Written: January 11, 2013
On September 28th, 2012 a federal judge struck down the U.S. Commodity Futures Trading Commission’s (CFTC’s) current iteration of federal position limits on holdings of commodity futures contracts. A month and a half later, the CFTC announced that the commission would appeal the court’s decision. The federal court’s 50-page decision, which vacated the CFTC’s position-limit rule, was not political. When one has the rule-of-law, decisions are based on logic, and this ruling is very logical. The article discusses this ruling as well as the challenges that the CFTC might have in challenging it.
Keywords: Commodity markets, hedgers, speculators, futures markets, risk, position limits
JEL Classification: G1, G11, G18
Suggested Citation: Suggested Citation