Dealers argue position limits for cash-settled contracts 'dangerous'

Michael Cosgrove - GFI Group
Michael Cosgrove - GFI Group

A Commodity Futures Trading Commission (CFTC) proposal for limits on cash-settled contracts – albeit at substantially higher levels than those proposed for physically delivered contracts – has provoked bitter arguments among dealers and regulators.In a consultation paper published last week, the CFTC has taken the position that cash-settled contracts can influence underlying commodity prices in transactions where one leg of a cash-settled deal involves a counterparty taking a posi