Comment Text:
Dear Commissioners,
I fully agree with the Commission's findings that "Large concentrated positions in the physical commodity markets can potentially facilitate price distortions given that the capacity of any market to absorb the establishment and liquidation of large positions in an orderly manner is related to the size of such positions relative to the market and the market's structure and is, therefore, not unlimited", and "Concentration of large positions in one or a few traders' accounts can also create the unwarranted appearance of appreciable liquidity and market depth which, in fact, may not exist".
Hence I support the Commission's proposal on position limits, including limiting exemptions to bona fide hedgers.
However, I submit that the proposed formula for silver resulting in a position limit of over 5,000 contracts for any single speculator, on an all-months-combined basis is way too high and will not be able to address the concerns in the findings above. I further support the analysis by Ted Butler suggesting a 1,500 contract position limit for silver as optimal.
While I do not trade on the Comex, I do own some physical silver, and the price I will receive when I decide to sell will be affected by the commodity market under your jurisdiction. Hence I urge you to lower the position limit for silver recommended by the staff in order to achieve a more effective price discovery mechanism.
Thank you.
CK Diong
www.politicalmetals.com
