Comment Text:
Dear Chairman Gensler and fellow Commissioners:
I urge you to approve the CFTC staff proposal on position limits, including limiting exemptions to bona fide hedgers, those who are industrial producers or industrial consumers of silver. Position limit exceptions should NOT be granted to speculators that include "investors" and "financial products dealers" as they can control their risk by decreasing positions and reallocating asset exposure.
The approved position limits should also be readjusted in the proposed formula for 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 too high of a threshold considering 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 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. 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, for all market participants except bona fide industrial producers and industrial consumers, for whom such limits should be established at or less than their individual prior 3 year average production or consumption.
Respectfully,
David Elkin
