Warning

Info

Warning

Info

Warning

Info

LSDefine

Simple English definitions for legal terms

Position limits

Read a random definition: Claflin-trust principle

A quick definition of Position limits:

Position limits are rules that limit the amount of trading or positions that a person can hold in a commodity. These limits are set by the Commodities Futures Trading Commission to prevent excessive speculation that can cause sudden or unreasonable changes in the price of a commodity. The limits are determined by a formula based on the previous year's average open interest in futures and options. Bona fide hedging transactions or positions are exempt from these limits. Spot month limits are stricter than other limits because physical delivery is required in that month. Exchanges can set their own position limits for commodities not specified by the CFTC, or impose position accountability requirements. Jointly-owned commodity interests are treated as a single person for compliance with position limits.

A more thorough explanation:

Position limits are rules set by the Commodities Futures Trading Commission (CFTC) that restrict the amount of trading or positions that can be held in commodities that have experienced "excessive speculation." These limits are put in place to prevent sudden or unreasonable fluctuations in commodity prices.

For certain commodities like corn, oats, wheat, soybeans, soybean oil, soybean meal, and cotton, the CFTC specifies the maximum position that one person can hold in a single month or in all months. The size of positions is denominated in contract units or contracts, which are relatively large quantities of a commodity by mass.

Position limits are stricter in the spot month, which is the month in which a futures contract matures and becomes deliverable. This is because physical delivery is required in that month, and excessive positions and disorderly trading practices can be particularly disruptive.

However, "bona fide hedging transactions or positions" are exempt from position limits. These are transactions or positions that normally represent a substitute for transactions to be made or positions to be taken at a later time in a physical marketing channel that are economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise.

The CFTC treats a pool of traders as a single trader. Limited partners and pool participants that have no knowledge of or control over the positions of the pool are exempt from this aggregation rule, as are commodity pool operators or commodity trading advisors with commonly-owned but independently-controlled positions.

For commodities other than those specified in the table, the exchanges can impose "position accountability" requirements instead of position limits. This allows the exchanges to ask high-volume traders for information related to the hedging and strategic nature of a heavy position, which facilitates detection of attempts at market manipulation.

Overall, position limits are put in place to prevent market manipulation and ensure fair trading practices in the commodities market.

pornography | Positive law

Warning

Info

General

General chat about the legal profession.
main_chatroom
👍 Chat vibe: 0 👎
Help us make LSD better!
Tell us what's important to you
THATS SO FUNNY
i cant i would go crazy
JumpySubsequentDolphin
20:50
i need to know who decided to do that.
JumpySubsequentDolphin
20:50
omg im on a plane weeeee
the devil
youre on a plane??? LSD made the mile high club??
20:50
yo splitterus are you in school already
20:50
it says ur c/o 2027
JumpySubsequentDolphin
20:51
@SplitterusClitterus: HAHAH yes
ur user is hilarioussss and no i just graduated this may and am now applying ---also im out of messages so ill take a lil
20:52
roger dat. see u in heck
im back, r u applying this cycle too
JumpySubsequentDolphin
21:32
this child fell asleep on me
JumpySubsequentDolphin
21:32
im so uncomfortable
just push him off the entire seat
JumpySubsequentDolphin
21:34
LMAOOOO
JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
AHHAHAHAHAHAHHAHAHAHAHAHAH
@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
LSD+ is ad-free, with DMs, discounts, case briefs & more.