May 7, 2010 / 9:37 PM / 7 years ago

CFTC says position limits apply all day

WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission on Friday issued a warning to traders advising them not to exceed speculative position limits at any point during the trading day, not just at the close of trading.

The release was issued to clear up confusion among traders as to whether limits applied only at the end of the day or also during the trading session.

"A trader whose position exceeds the applicable speculative position limit at any time during the day is in violation of the Commodity Exchange Act and CFTC regulations, even if the position is subsequently reduced to a level within the applicable limit by the close of the market for that day," the CFTC said in a statement.

CFTC, which oversees the U.S. futures markets, said it applied to both federal limits for certain agricultural commodities and position limits set by exchanges.

A CFTC spokesman said the announcement had been in the works for some time and was not tied to the Thursday's wild price swing on Wall Street.

"Today's release had absolutely nothing to do with yesterday's market action," the spokesman said.

Separately, the CFTC proposed in January a rule that would cap the number of speculative contracts traders can hold in oil and gas futures markets. The comment period, which ended on April 26, generated more than 8,000 responses. There is no timetable when or if the agency will propose a rule.

It also is determining whether to issue similar curbs on gold and silver speculation.

Additional reporting by Tom Doggett; Editing by Alden Bentley

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