At another panel discussion derivatives exchange surveillance officers discussed the impact of large traders on the futures market. However, the panelists had difficulty agreeing on the basic definition of a large trader. Joseph Hawrysz, managing director of market surveillance at the Chicago Board of Trade (CBOT), said that one way to define a large trader is as one that holds a position which can influence market price.
Timothy Doar, managing director of risk management at the CME, defined it as anyone who controls 1-5% of the open interest, with an emphasis on inter-day risk profile. “What we should’ve learned from Long Term Capital Management, but one of the lessons we learned from Refco was that it’s difficult to know when there are positions elsewhere,” said Gary DeWaal, general counsel and global director of compliance at Fimat Group, a Paris-based broker, commenting on the potential for systemic-type risk from a build up of large positions.