COMEX eliminates price fluctuation limits

Discussion in 'Financial Futures' started by nimrod, Jun 2, 2006.

  1. nimrod


    Gold, silver, copper or aluminium trader?

    Think you've seen major price action already this past 12 months?

    Well, you ain't seen nuthin yet!

    Why? - because NYMEX has just announced that, effective Sunday 4th June for electronic trading and Monday 5th June for the pit-traded contracts, the COMEX division will operate WITHOUT price fluctuation limits. That's right WITHOUT PRICE FLUCTUATION LIMITS!

    The NYMEX statement went on to say: "This change was made in order to better facilitate the core functions of price discovery and hedging provided by COMEX products," Oh! is THAT what it's for? I see.

    Hmmm. After 3 no-notice increases to margin requirements for silver this year, together with startling physical inventory movements in both silver and gold - plus price increases which are hurting - I mean REALLY hurting the normous 'establishment' short position is the PM's. Something is clearly afoot. TPTB are clearing the decks; so if you dabble in PM futures, you'd better watch out.

    Call me a cynic but the most likely reason that I can see is to facilitate further 'orderly' unwinding of the Silver/Gold carry trades with a little coordinated help from TPTB. Expect wondges of selling (backed by offical physical holdings materialising from wherever), resulting a collapsing prices, allowing the shorts to buy back at bearable losses; pushing prices back up again - and so on. If you like trading volatility, that IMHO is what you're going to get from next week on - for a while and there's likely to be serious coordination between London, Tokio (remember that rule change on naming open interests a couple of months back?) and NY too.

    Novices beware!
  2. What/who is TPTB?
  3. Nrod;
    Sounds great, pure capitalism @ first glance;
    except for the times when what appears to be a bad quote actually is not, or a rouge trader.......

    Sounds more dangerous except for the very highest capital traders.

    With some traders not having any sense about position size;
    actually like CME trading ''price limits''[5%,10%,15%,20%,30%]

  4. nimrod


    'The Powers That Be'
  5. from 643 to 0 to 3000, all in one day at the comex
  6. Thanks!
  7. Long gamma is the place to be in the metals complex. :cool:
  8. RedDuke


    Very interesting. I wonder what would have happened on comex a month or 2 back when Silver decreased by $2 within 5 minutes and went limit down, if these new rules were there.

    Some people probably do not realize how volatile these markets can get on instance moments. For example, not many pay attention that copper daily fluctuations today is equal to its total worth 5 or so years back.

    This will end in tears, and I am afraid in rather large ones.