7.3.3.4. Speculative Position Limits
To protect futures markets from excessive speculation that can cause unreasonable price fluctuations, the CFTC and the exchanges impose limits on the size of speculative positions in futures markets. The CFTC does not allow speculators to hold or control any net long or short futures or options positions beyond these position limits for the purchase or sale of 25 physically settled commodity derivative contracts. These limits are applied to positions that are directly or indirectly linked to the price of a commodities futures contract or the underlying commodity that is specified for delivery. These limits also apply to SWAPs that share specifications with the derivatives contract (or are very similar), but these SWAP limits will not be enforced until 2023. Here is a sample of some of these speculative position limits.
|
Futures Contract |
Exchange |
Limit by Number of Contracts |
||
|
Spot Month |
Single Month |
All Months |
||
|
Oats |
CBOT |
600 |
2,000 |
2,000 |
|
Soybean Meal |
CBOT |
1,500 |
16,900 |
16,900 |
|
Cotton No. 2 |
ICE |
900 |
5,950 |
11,900 |
|
Hard Red Spring Wheat |
MGEX |
1,200 |
12,000 |
12,000 |
|
Hard Red Winter Wheat |
CBOT |
1,200 |
12,000 |
12,000 |
The exchanges set spot limits for m