COMMODITY TRADING
of federal position limit rulemakings. And in fact, three Commissioners (of the time) had noted that no such finding had been made. The court essentially found that a plausible, “plain reading” of the Dodd-Frank amendments to the Commodity Exchange Act could lead one to conclude that the CFTC still needed to make a finding of necessity before imposing new limits. The court acknowledged that there is some ambiguity on this point; that is, there is more than one plausible interpretation of the Dodd-Frank amendments regarding whether the imposition of federal position limits is mandatory or not. That said, the court ruled that the CFTC would need to specifically address this ambiguity with its expertise rather than asserting that this ambiguity does not exist. The federal court’s September 2012 decision on commodity position limits was a promising sign that economic logic may prevail.
Conclusion In Pringle and Fernandes (2007), the authors
noted: “As has been the case for hundreds of years, the cycles of inflation and deflation come and go. To a large extent commodities and their relative values play a critical role in this pendulum of
macroeconomics.” As the “economic pendulum swings,” this article advocates that market participants periodically explain the economic function of futures markets in addition to figuring out how to adjust their trading strategies to new risk environments. Hopefully, this article can help market participants in achieving these goals. •
Hilary Till is a Research Associate at the EDHEC- Risk Institute. She is also the co-founder of a
proprietary trading and research firm as well as being a principal of Premia Risk Consultancy, Inc.
She has presented her research on the commodities futures markets to the following
institutions: the US Commodity Futures Trading Commission, the International Energy Agency, and the UK Financial Services Authority.
www.edhec-risk.com
The information contained in this article has been assembled from sources believed to be reliable, but is not guaranteed by the author The author would like to thank Hendrik Schwarz for insights that were helpful in the development of this article. Please note, though, that the ideas and opinions expressed in this article are the sole responsibility of
the author. As such, the views expressed in this article do not necessarily reflect those of organizations with which the author is affiliated
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84