David Fry

The CFTC Is Needlessly Breaking Good Products

Great point on "delivery" issue.


On Aug 22 11:46 AM iknow1 wrote:

> As a commodity trader I have tried the DBA and UNG ETF's and while
> thay do perform, the transaction costs associated with rebalancing
> tend to subtract from the percieved performance advantages. Because
> of their structure they probably do not need additional regulation.
> The popularity of the UNG ETF should be a message that it should
> be allowed to expand the shares available to the financial community.
>
>
> You are correct about the position limits on commodities. They serve
> a purpose, to prevent cornering a market. However the DBA or UNG
> index does not give the buyer a right to take delivery of a commodity.
> Therefore it is immaterial how many shares are outstanding. If at
> some point there are too many shares outstanding then the index won't
> track and investors will vote with their feet to dump them.
>
> Summary, Overregulation will harm some of these products.