The Commodity Futures Trading Commission held its third and final hearing on Thursday August 6 on the subject of speculation in commodity markets, with opinion once again divided on the need for position limits.
John Hyland, chief investment officer of United States Commodity Funds, said commodity funds “should be dealt with as a flow-through vehicle” because they acted as passthrough conduits for their end investors, rather than as single investors.
He argued in his testimony that index investors were simply price takers who just tracked price movements rather than manipulated them.
Hyland said funds were a way for investors to “hedge their pre-existing price risk in commodities” rather than being a source of risk.
However, John Arnold, managing partner of Centaurus Advisors, the Houston-based energy trading hedge fund, argued for position limits to be imposed, but only on physically delivered contracts and not those that are...