TOCOM to extend use of loss-cut system

24 Oct 2007 email

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Tokyo Commodity Exchange (TOCOM) will extend its loss-cut system to cover all products scheduled to be implemented 31 January, 2008.

TOCOM originally launched the loss-cut system when the exchange launched its gold mini contract on 17 July.

The loss-cut system loss-cut system allows traders the possibility to prevent losses over a limit specified by each customer. Under the loss-cut system, an FCM will execute an order to offset a contract position, in accordance with a predefined procedure, if his customer's loss reached a certain limit specified by the customer in advance.

“At the highest level of economic motivation for their actions and most generous interpretation of them, they are trying to influence prices in a way that benefits mankind and they should be considered heroes for it.”

John Lothian on speculators in the commodity markets.