Comment Text:
Chairman Gensler and Commissioners:
Some commissioners have indicated by their comments in CFTC public meetings and in speeches that they understand “concentrated positions” are manipulative. All the commissioners, whether having stated it or not, know that “concentrated positions” are manipulative. At least one commissioner has commented that at times such concentrated positions have been as large as 40% of the entire Comex silver market. The CFTC’s primary role as a regulator is to ensure that illegal price manipulation of silver does not occur on the Comex.
I urge you to approve the staff’s proposal on position limits, including limiting exemptions to bona fide hedgers, with the exception of silver. The current formula proposed by staff 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 the equivalent of 25 million ounces of silver. This is too high of a threshold in light of the realities of the world silver market.
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 using more than that amount. 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 and the ability to manipulate silver prices on the COMEX, contrary to commodity law. It is very clear to the public that there is short side manipulation that is frequently successful. The purpose of speculative position limits is to prevent such a circumstance.
Please institute a 1500 contract (7.5 million ounce) position limit for silver.
Respectfully submitted,
Gary Hevelone
