The age-old debate over position limits is still prevelant in today's markets, but critics should look to history
When I first became involved with the futures business in the
1960s as outside legal counsel to the Chicago Board of Trade -
then, the worlds' largest futures market - there were
prescribed limits on the size of futures positions that
speculators could hold or control -but none for hedgers.
The Government set most such limits but, as the futures
markets expanded beyond farm products, which then almost 100%
of volume, now less than 10%, the exchanges determined such
limits or accountability levels for nonfarm futures.
At that time, the Commodity Futures Trading Commission
(CFTC) did not exist and the markets were regulated by a unit
within the US Department of Agriculture known as the Commodity
Exchange Authority (CEA).
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