Comment Text:
10-005
COMMENT
CL-02642
About.Ag
About Silver- ...
the buck stops here
...
.~=zp://About.Ag
Robert Perry
290 Turnpike Road #355
Westborough, MA
Commodities Futures Trading Commission
Attn: Office of the Secretariat
?hree Lafayette Center
1155 21st Street, N.W.
Washington, DC 20581
Dear CFTC,
First, thank you for holding a meeting on position limits for metals.
Y represent a website for silver investors, http://About.Ag. The site represents
some of the millions of smaller silver investors, who typically purchase anywhere
from 1 to 1,000 ounces of silver at a time. Their input is relevant to metals
position limits, as the price of the silver they buy and sell is based on the spot
price of silver plus or minus a premium. The spot price is usually based on the
COMEX futures pricing. In other words, if the spot price goes up $.50, the price
they pay (or get) for an ounce of silver goes up $.50. Therefore, accurate price
discovery on the COMEX is very i~Dortant to them.
We believe that CFTC-enforced position limits on metals would be beneficial to the
public.
The 1,500 contract limit that others have suggested seems appropriate
co us,
as does exemptions for bona fide hedgers. 1,500 contracts is large
enough to meet the needs of most. or all legitimate traders, while small enough to
help ensure that speculation helps the price discovery process, not hinder it.
We also firmly believe that exemptions for short positions should only be allowed
if it can be proved that true physical metal backs the positions (such as with bar
weights and serial numbers). Specifically,
certificates for metal in
unalloeated accounts should not be allowed to back
short
positions.
Unallocated metal in London is backed by the 'general stock' of a bullion dealer,
with no guarantee requiring (and nothing suggesting) that all the metal actually
exist. If there are otherwise bona fide hedgers with unallocated metal, it is a
simple procedure to convert the metal to allocated accounts.
With all the concerns that various interested parties have about the COMEX and
price discovery -- from speculators causing high copper prices to speculators
causing volatility in silver and gold prices -- these measures will help ensure
that the futures markets operate smoothly. Such measures can help ensure that the
Onited States has the premier futures market in the world. If there are indeed
any shady transactions out there, and they move to the OTC markets or vanish, the
American public will not be disappointed.
Sincerely,
About.Ag
