CFTC considers measures aimed at speculation

An interesting story from the Washington Post about the Commodity Futures Trading Commission (CFTC) chairman Gary Gensler considering implementing  policies that will reduce the price volatility caused by speculation on the commodity exchange.

The CFTC also has plans to regulate derivatives (financial contracts whose prices are derived from the price of something else. CLICK HERE for more information), limit the size of an investment a single firm can make in a particular commodity and allow greater public disclosure about the holdings of commodities traders:

The Commodity Futures Trading Commission will consider new measures to curb speculation in the markets for energy and other commodities, the agency is set to announce today.

The move aims to reduce the volatility of prices but faces resistance from top Wall Street firms, which fear the efforts could cut into profits. Regulators and lawmakers increasingly worry that these firms have used their size and power to inflate the prices of commodities, booking profits in the process. READ HERE.

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