What are CFTC position limits?
What are CFTC position limits?
In that same year, the CFTC determined the federal position limit levels for non-spot months should be 10 percent of open interest for the first 25,000 contracts of open interest with a marginal increase of 2.5 percent of open interest thereafter.
What are CME position limits?
[8] The federal spot month speculative position limit for CME Live Cattle (LC) adopted in the 2020 Final Rulemaking features the following step-down limit: (1) 600 contracts at the close of trading on the first business day following the first Friday of the contract month; (2) 300 contracts at the close of trading on …
What are spot month limits?
Generally, spot-month position limits for referenced contracts will be set at 25% of estimated deliverable supply. For each referenced contract, these limits will be set at 10 percent of open interest in the first 25,000 contracts and 2.5 percent thereafter.
What is a position limit?
A position limit is a preset level of ownership established by exchanges or regulators that limits the number of shares or derivative contracts that a trader, or any affiliated group of traders and investors, may own.
What is bona fide hedging?
(B) Twelve months’ unsold anticipated production of the same commodity by the same person provided that no such position is maintained in any future during the five last trading days of that future. …
What is the difference between an accountability level and a position limit?
Position Limits are calculated on a net futures-equivalent basis by contract, and include contracts that aggregate into one or more base contracts as set forth in the Table. Position Accountability Levels are levels which a market participant may exceed and not be in violation of an Exchange Rule.
Who reports to CFTC?
Under the Commission’s LTRS, clearing members, FCMs, and foreign brokers (collectively called reporting firms) file daily reports with the Commission under Part 17 of the CFTC’s regulations.
What is CFTC regulation?
What Does the CFTC Regulate? The CFTC regulates the U.S. derivatives markets. This includes the commodity futures, options, and swaps markets as well as over-the-counter (OTC) markets.
What are limit positions?
What is accountability limit?
“Accountability Limit” shall mean a threshold for positions held set by the Exchange which if exceeded may trigger enhanced reporting requirements.
How are position limits calculated?
Position limits are determined on a net equivalent basis by contract. This means that a trader who owns one options contract that controls 100 futures contracts is viewed the same as a trader who owns 100 individual futures contracts. It’s all about measuring the control a trader can exert over a market.
What is the Commission’s position limits for derivatives?
The Commission, in its Position Limits for Derivatives (2020 Final Rulemaking), established new and/or amended federal speculative position limits for 25 physically-settled commodity derivative contracts and certain linked instruments.
What are speculative position limits for futures and options?
Most physical delivery and many financial futures and option contracts are subject to speculative position limits. For several markets (corn, oats, wheat, soybeans, soybean oil, soybean meal, and cotton), the limits are determined by the Commission and set out in Federal regulations ( CFTC Regulation 150.2, 17 CFR 150.2).
What is the non-spot month speculative position limit for legacy contracts?
With respect to each CRFC that is a Legacy Contract, the federal non-spot month speculative position limit applies to physically-settled and cash-settled Referenced Contracts in the aggregate. Consequently, a market participant may net positions across physically-settled and cash-settled Referenced Contracts. [11]
How are multiple accounts treated under the speculative position limits?
In order to achieve the intended effect of the speculative position limits, the Commission and the exchanges treat multiple positions subject to common ownership or control as if they were a single trader. Accounts are considered to be under a common ownership if there is a 10 percent or greater financial interest.
