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Comment for Sunshine Act Sunshine Act Meeting: March 25, 2010

  • From: James D Hanson
    Organization(s):

    Comment No: 20791
    Date: 4/18/2010

    Comment Text:

    10-005
    COMMENT
    CL-00492
    From:
    Sent:
    To:
    Subject:
    James Hanson
    Sunday, April 18, 2010 2:23 PM
    Metals Hearing
    Open Comments on Position Limits
    To the Commission,
    I appreciate the opportunity to comment on my hope for the implementation of position limits for
    precious metals.
    Much appreciation is deserved in the consideration of the commodity position limits issue over the
    past few months. The right thing to do is not always the easy thing to do. Accordingly, I'm impressed
    with the recent public hearings the CFTC has courageously accommodated. In my view, speculative
    position limits in COMEX silver of no more than 1500 contracts should be enacted. Additionally, I feel
    as many others, hedging exemptions should not be provided as a loophole for large commercial
    interests. I agree that short positions serve to add liquidity to the market and also serve as a useful
    function of check-in-balances. Theoretically, short selling helps to police the market, and some voice
    that leveraged proprietary trading provides badly needed liquidity. On a non-leveraged basis, a short
    position for a long position makes sense. There is much room for debate over the extent of leverage
    and concentration that actually exist, but it appears to be rather straightforward that for silver, the
    levels of leverage are beyond actual silver resources available for delivery.
    In my view, selling something you don't have is an unfair system of price discovery although many
    accept this as normal business practice. This said, if position limits are not enacted soon, the
    possibility exists that the unleveraged turtles will storm past the leveraged rabbits faster than anyone
    could imagine, that is, if the rabbits run out of food. If we do not strive to achieve fair price discovery,
    we soon may be living in Alice in Wonderland.
    Please stop the levels of concentration in COMEX silver futures that have been experienced over the
    past few years on the short side of the market.
    Thank you for your consideration.
    James D. Hanson
    I rvi ng, TX
    972-904-0296