Goldfinch Capital Natural Gas
Goldfinch Capital Fined for Exceeding Natural Gas Limit
Goldfinch Capital Management LP has been fined by CME Group Inc. for violating natural gas trading rules. This is the third time in two years that the hedge fund has exceeded the limits on the size of natural gas bets. Goldfinch Capital Management has been fined $50,000 plus $17,287 in profits from the trades.
Goldfinch had a net short position of 1,053 on Nov. 23; in other words, the hedge fund had 1,053 more bets that prices would fall than bets that prices would rise. This is 5.3% more than speculative investors are permitted to hold in the front-month contract during the three trading days preceding its expiration. The fund later closed out its short positions to comply with exchange limits.
Position limits are intended to prevent large speculators from wielding an outsized influence in the futures market. These limits are usually concentrated in a contract's last days, when prices are most likely to affect producers and end users.
"It's a hard rule," said Tom Saal, a broker with INTL Hencorp Futures in Miami. "If you're over the rule, you get the fine for it."
Position limits have been a source of debate as policy makers try to reshape the regulatory landscape after 2008's surging energy prices and financial crisis.
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