It's Official: ICE Sets Cotton Position Limit

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Thu, 02/03/2011 - 17:07 | 932400 redpill
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"Market Surveillance Department"

Orwell would struggle to come up with a more authoritarian sounding name

Thu, 02/03/2011 - 17:32 | 932509 Sudden Debt
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Thu, 02/03/2011 - 18:19 | 932710 hedgeless_horseman
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Hugo Chavez was already here.

Thu, 02/03/2011 - 18:53 | 932842 malusDiaz
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Sounds like price controls...


First limit quantity, Then limit price.


"Why do you need to buy that much cotton?"   "What are you going to do with that much gold / silver? you can't possibly USE it for anything, so we're going to cancel your contract."

Thu, 02/03/2011 - 19:45 | 932986 DosZap
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Let em', they do that, and PM's WILL really skyrocket, one way or the other black market.

What happens when anyone had done similar controls before?.

Thu, 02/03/2011 - 17:12 | 932412 EscapeKey
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They really are trying to stop the tide.

They should try constructing levees out of all the cash they're printing.

Thu, 02/03/2011 - 20:30 | 932428 99er
Thu, 02/03/2011 - 17:17 | 932436 NOTW777
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can we get a comment ben. oh, you have nothing to do with this - ok

did u see egypt

Thu, 02/03/2011 - 17:23 | 932454 whatsinaname
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The Messiah sees no evil and hears no evil.

Thu, 02/03/2011 - 17:24 | 932457 FoieGras
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ES margin requirements were hiked in Sep/Oct 2008 if I recall correctly. 

Thu, 02/03/2011 - 17:24 | 932459 flaunt
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If specs temporarily liquidate commods and put those profits to work in unloved gold and silver, watch out.  Margin hikes will surely come but the specs are mostly gone at this point so the effect will be minimal... For now.

Thu, 02/03/2011 - 17:28 | 932486 TooBearish
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Sell de kottin mon!

Thu, 02/03/2011 - 17:31 | 932501 Fritz
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Let me guess....JPM will get an exemption.

Thu, 02/03/2011 - 18:10 | 932675 NOTW777
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yes, and if u got an obamacare waiver, it comes with a cotton exemption

Thu, 02/03/2011 - 19:47 | 932994 DosZap
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What?, no more free tampoooons?

Thu, 02/03/2011 - 17:34 | 932518 scratch_and_sniff
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ES? ...sure who feckin needs it?

Thu, 02/03/2011 - 17:58 | 932626 Ecoman11
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This is Riganomics.

Thu, 02/03/2011 - 18:14 | 932691 NOTW777
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hilarious exchange between CEO of NEM who just offered cash for FRG and the clowns on fast money who are short.


Thu, 02/03/2011 - 18:15 | 932696 bob_dabolina
bob_dabolina's picture we can have limit up days in other commodities.

Thu, 02/03/2011 - 18:19 | 932712 Yen Cross
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CME cotton close off .049 on the close

Thu, 02/03/2011 - 18:29 | 932755 trav7777
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Establish a position limit of 0 for all longs and just be done with it

Thu, 02/03/2011 - 18:36 | 932778 godzila
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sorry but can anyone explain what's wrong with position limits, especially in soft comos ?

Thu, 02/03/2011 - 18:52 | 932838 AbandonShip
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I believe it's the timing of these position limits that's questionable.  Why now?  One answer is because the prices are rising due to inflationary monetary policy and that's not acceptable for the Central Bankers as one of their goals is stable prices.  Establishing position limits instantly throws cold water on the price and produces the low/stable prices CBs love to see. Had the limits been in place all along no one would object.  To put it crudely:   Policy = Good, Volatile Policy = Bad

The other reason generally proffered for suspiciously timed margin hikes and position limits is that the House (i.e., ICE, CME, etc.) is protecting itself as the wager and pot size increase (sorry for the over use of gambling terminology but I think it fits well).

Thu, 02/03/2011 - 19:38 | 932961 godzila
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Ok I see your point and actually concur. Was under the impression that Tyler was somehow upset by the actual principle.


Thu, 02/03/2011 - 18:46 | 932815 buzlightening
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Supreme move in cotton position limits with the silver cftc investigation nearing 3 years now!! What a bunch of vampire squidding bastards all the live long day!!  Sucking the ever livin life out of the host working class! rat bastards all!!

Thu, 02/03/2011 - 19:50 | 933002 TooBearish
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I dunno why these fuks are so obsessed with long specs ramping futures and having limits let em ramp em to the moon and let high prices cause producers to add capacity, hire workers and sell forward to the specs WTF is wrong with that?

Fri, 02/04/2011 - 01:59 | 933723 Lord Koos
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In the case of food commodities, ramping = starvation.

Thu, 02/03/2011 - 19:55 | 933018 pacu44
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Yeah, Free Market Capit=lism at its finest...

Thu, 02/03/2011 - 20:42 | 933139 Henry Rearden
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Thu, 02/03/2011 - 20:41 | 933165 Henry Rearden
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Tyler I Love you and your Blog Zerohedge, but this is borderling worthless information.  Who cares what the margin requirement are on anything.  They could increase the margin requirments on all products to infinity, the truth of the matter is that its behind position limits.  And when it comes to position limits, they only limit the amount of short contracts you can have.  Never the longs.  Never.  What if you are a shirt producer in China, shouldn't you be able to buy all the cotton in the world to produce Justin Beeber Concert T-shirts? 

The anwser is Yes you should be able to buy all the cotton in the world to produce Justin Beeber T-shirts, but its a horrible, terrible future expectation of society.  

Cotton and rice are jumping on the cyclones in Australia, not because average Americans are getting squeezed on commodity prices.  And not because people are there on both sides to create an equilibrium in that commidity's price.

Moreover, I doubt the average reader and blogger here coult tell me the difference between a cyclone and a hurricane without looking it up on Wikipedia.

Fri, 02/04/2011 - 04:53 | 934019 AbandonShip
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Henry:  I missed the part of the ICE statement above that mentioned this position limit was *only* on the short side.   It states it's for positions "in excess" of 300 contracts.  Sounds like a long-only position limit to me.  Please clarify your statement.

Thu, 02/03/2011 - 20:51 | 933190 Yen Cross
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Ohh Darn I made the Mistake of venturing into slightly responded into ville. Think long and Hard before you post here again. I have a question for you. What is the difference between h-1 and m-5. Thank you.

Thu, 02/03/2011 - 21:00 | 933213 CU1981
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Mark this post !! ;-)

It will all be blamed on those evil speculators....


Nice pickup TD, when they raise the ES margins, look for a PM flight to safety!!



Fri, 02/04/2011 - 06:28 | 934053 Expat
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My understanding is that the limit applies only to the front month and then only up to the first notice (which is five days prior to the first business day of the month).  So, you can still hold 5000 contracts in the front month, but you have to roll them before the first notice. 

This is designed to avoid spqueezes and manipulations. 

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