01 Jan 2001, Energy Risk glossary , Energy Risk
A limit on the size a single trader’s position for a particular commodity. Positions that qualify as bona fide hedges do not fall within the position limits. Position limits can be for a single-month position (a spot month) or for an all-months-combine position. Dodd-Frank proposed the introduction of mandatory position limits. Following a legal challenge these have been suspended. The Markets in Financial Instruments Directive II (MIFID II) is also expected to introduce mandatory position limits.
* see also Dodd-Frank; Markets in Financial Instruments Directive II (MIFID II)
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