Comment Text:
Dear Chairman Gensler and fellow Commissioners:
Please approve the staff’s proposal on position limits, including limiting exemptions to bona fide hedgers. Please adjust the proposed formula in silver. The current formula would result in a position limit of over 5,000 contracts for any single speculator, on an all-months-combined basis.
5,000 contracts is 25 million ounces of silver. There are only three mining companies in the world who produce more than 25 million ounces of silver per year and only a similar number of industrial consumers who rely on accurate price discovery in the small market. Any speculator holding an amount of silver derivatives greater than what 99% of the world’s silver producers and consumers make or use in a year would have inordinate pricing power. The purpose of speculative position limits is to prevent a circumstance which could lead to manipulation. CTFC has already admitted one player has roughly 90% position. This should be addressed either by a phased wind down with an enforceable schedule or an outright deadline.
My request is that you please consider a more modest 1500 contract (7,500,000 ounce) position limit for silver.
7,500,000 oz. of silver is still more than what the vast majority of the world’s silver consumers use in a year.
Sincerely,
Matthew J Corso
