Traders would be limited in the positions they can hold in oil, wheat, gold, and other commodities under a proposal approved by the U.S. Commodity Futures Trading Commission (CFTC).
The CFTC proposal, approved on a 3-to-1 vote yesterday, would cap the number of futures contracts a company can hold in 28 commodities. The limits were sought by Congress after airlines, trucking firms, and consumer groups blamed speculators for surging fuel prices in 2008. Among the measure’s supporters was Commissioner Bart Chilton, who yesterday announced that he would soon step down from the agency.
Outside the spot month, the caps limit traders to 10 percent of the first 25,000 contracts of open interest and 2.5 percent of amounts beyond that.
Senator Carl Levin, a Michigan Democrat who has blamed speculators for driving up commodity prices and manipulating prices in some cases, said the CFTC’s rule “will help fill a big hole in the needed protections against such abuses.”