Comment Text:
Dear Chairman Gensler and fellow Commissioners:
I invest in silver, and have invested in silver for the last 8 years. I follow the market closely, and I have followed the events at the CFTC closely. I urge you to approve the staff’s proposal on position limits, including limiting exemptions for bona fide hedgers. Some of these exemptions are so broad you could drive a monster silver mining truck through them. Indeed, it is also important to define very carefully what a "bona fide" hedger is.
I also ask you to readjust 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 the equivalent of 25 million ounces of silver. This is far too high of a threshold in light of the realities of the world silver market. Silver is a very tiny market, about 3% of the capitalization of Apple. Thus, allowing one entity to control 25 million ounces is simply too much.
By way of comparison, 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 could have inordinate pricing power. The purpose of speculative position limits is to prevent such a circumstance.
Please institute a 1500 contract (7.5 million ounce) or lower position limit for silver.
Respectfully submitted,
Paul A. Maddock
