Dodd-Frank Position Limits: The Devil is in the Details

Commodity markets can be volatile, so end users routinely hedge the risk that prices will move against them and potentially eliminate some or all of their profit margin.

At the same time, speculators with the expertise to spot trends are often willing to take on the risks that hedgers transfer to them as counterparties in forwards, futures and swaps contracts. Such transactions allow hedgers to concentrate on their core business: creating, handling, transforming and transporting physical commodities.

This white paper discusses the key risk considerations under Dodd-Frank and the implications these may have on organisations.