Speculative Activity on Exchanges is Managed by Position Limits

Position limits and accountability levels are required “to diminish potential problems arising from excessively large speculative positions.”  These limits restrict the size of a position that a participant can carry, and are set at a limit that greatly restricts the opportunity to engage in possible manipulative activity.


proposition1MD's picture

Limits are governed and imposed primarily by different investment groups and their governing forces and therefore are irrelevent. Incrimental increases still abide by these limits and if all the goups or a great portion of them who hold large shares manipulate the market together the inherent increase is inevitable wile diminishing risk. Truth be told! To put it in lay terms. If I have 90% of a resource/good(or the peopele that controll 90% of that resource all agrees to act the same way) and no one else has a means to get it, I can dictate how much I get for that good/resource. Yea, I will not have controll of that 10% but realistically that 10% will hold out to get as much as they can too! We had laws in place that were repealed under the Clinton administration that stopped large investment banks from market manipulation such as this, but now the game has changed.

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